Dual Moving Average Trend Following with Fixed Stops and Targets

Summary

This strategy uses a 50-period exponential moving average and a 200-period simple moving average to generate directional signals. A cross above the slower average opens a long position, while a cross below it opens a short position. It also closes an existing position when the opposite cross occurs. The stated exits place a stop 3 points from entry and a target 7.5 points away.

The document includes daily BTC/USDT futures backtest settings spanning 2019 to 2024, but reports no performance results. It describes possible benefits such as systematic signals and defined exits, while identifying whipsaws in ranging markets, slippage, and the limits of fixed distances. It suggests volatility-based exit sizing, trend filters, position sizing, and trailing stops as possible improvements. The source labels the stop and target values as estimates, and the document does not establish that they work across instruments or market conditions.

Key ideas

• A 50-period EMA crossing above or below a 200-period SMA generates long or short signals.
• The strategy sets a 3-point stop and a 7.5-point target from the entry price.
• An opposite moving-average cross closes the current position.
• Ranging markets, slippage, and fixed exit distances may impair results.
• The published settings describe a daily BTC/USDT futures backtest but give no performance statistics.

Tags

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