Confirmed SMA Crossovers with Fixed Stops and Targets

Summary

This trend-following method uses a short and a long simple moving average to signal direction. A crossover must persist into the next bar before entry: the short average crosses above the long average for a long signal, or below it for a short signal. The document specifies default lengths of 10 and 30 periods, plus a 1% stop loss and a 10% take-profit level.

The source gives backtest settings for BTC/USDT futures on daily bars from July 2023 to July 2024, but no performance figures or evaluation results. The accompanying discussion warns that moving averages react slowly and can generate repeated false signals in sideways markets. It also notes that a fixed stop may not suit changing volatility. Suggested extensions include volatility-based stops, trend-strength filters, volume confirmation, and tests across parameter choices; none is shown to improve results here.

Key ideas

• The strategy uses a 10-period and a 30-period SMA as its default crossover pair.
• A crossover must remain in place for one additional bar to confirm an entry.
• The stated risk controls use a 1% stop loss and a 10% take-profit level.
• Published backtest settings specify BTC/USDT futures and daily bars, with no reported results.
• Lag and sideways-market whipsaws are key limitations of the method.

Tags

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