Daily Long-Only SMA Golden and Death Cross Trend Strategy

Summary

This daily trend-following strategy uses a fast and a slow simple moving average, with 50-day and 200-day periods as its defaults. It opens a long position when the fast average crosses above the slow average and closes positions when it crosses below. The periods, capital allocation, and whether to block re-entry while a position is open can be adjusted. The implementation also marks crossover signals and open positions on the chart and provides alerts.

The document describes the rules and risks but presents no performance results. It notes that moving averages lag, crossovers can whipsaw in sideways markets, and waiting for a death cross can allow substantial drawdown before exit. The default uses all account equity and specifies a commission, while slippage and other costs remain unaccounted for. Suggested improvements include confirmation filters, adaptive sizing or periods, extra exit controls, and broader backtesting; these are proposals rather than tested findings.

Key ideas

• A golden cross between the fast and slow SMAs opens a long position.
• A death cross closes open positions, so the strategy remains out of the market between signals.
• The default SMA periods are 50 and 200 days, and the strategy can block re-entry while already invested.
• Lag, sideways-market whipsaws, concentrated capital use, and trading costs are key limitations.
• The document suggests added confirmation, risk controls, and broader validation but reports no backtest results.

Tags

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