Buying Moving-Average Pullbacks in an Ordered Uptrend

Summary

This example stock-selection strategy looks for a bullishly ordered moving-average structure: the 5-day average must exceed the 10-day, then the 20-day, 40-day, and 120-day averages. Among those stocks, it identifies a pullback when the day's low falls below the 10-day average of closing prices. The proposed entry is at the next session's open.

After entry, the exit condition is a 5-day average below the 40-day average, with the sale scheduled for the following open. The strategy allows up to 20 simultaneous holdings. The document identifies the rules as an illustrative example intended for a specific platform environment and says users may modify them. It supplies no performance data, risk analysis, benchmark, transaction costs, or implementation details beyond the rule summary. As a result, it describes a testable trend-following pullback setup, but does not demonstrate profitability or address how signals, execution, and portfolio allocation behave in practice.

Key ideas

• The entry screen requires five moving averages to be ordered from shortest to longest in descending value.
• A pullback qualifies when the day's low drops below the 10-day closing-price average.
• The strategy enters at the next day's open and exits after the 5-day average falls below the 40-day average.
• The example permits a maximum of 20 concurrent stock positions.
• No backtest results or transaction-cost assumptions are reported.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.