Dual BBI Crossover Strategy Using Short- and Long-Term SMA Groups

Summary

This long-only trend-following strategy compares two Bulls and Bears Index (BBI) series. Each BBI is the average of four simple moving averages: the short group uses periods 12, 24, 48, and 80, while the long group uses 120, 240, 480, and 600. A cross of the short-group BBI above the long-group BBI opens a long position; a cross below closes it. The periods are configurable.

The document argues that combining multiple averages may reduce reliance on a single signal and help compare short- and long-term trends. It provides no performance measurements, however, so it does not establish whether the strategy is profitable or more reliable. Its own caveats include lag, repeated crossovers in ranging markets, and the absence of stop-loss or take-profit rules, which may leave the strategy exposed to drawdowns. It suggests testing alternate periods and considering additional trend, volume, or volatility filters and explicit risk controls before practical use.

Key ideas

• Each BBI is the arithmetic mean of four SMAs with distinct lookback periods.
• The short-period BBI crossing above the long-period BBI opens a long trade.
• A downward crossover closes the long position; the rules do not open shorts.
• The strategy can lag and may trade repeatedly in ranging markets.
• The described implementation contains no stop-loss or take-profit mechanism.

Tags

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