Dual SMA Crossover Trading with Percentage Take Profit and Stop Loss

Summary

This trend-following system uses a short and a long simple moving average to generate directional signals. The documented defaults are 50 and 200 periods: a cross of the short average above the long average opens a long, while a cross below closes that long and opens a short. Percentage-based exits are set relative to average entry price, with a 2% profit target and a 1% stop for either direction.

The document describes adjustable average lengths and exit percentages, and supplies a BTC/USDT futures backtest configuration covering a short period. It provides no performance results, so the settings are a strategy specification rather than evidence of profitability. The stated limitations include whipsaws in sideways markets, lag around turning points, and fixed exits that may not fit changing volatility. Suggested extensions include volatility-scaled stops, signal filters, position sizing, and evaluation across market conditions.

Key ideas

• A cross above the long SMA opens a long position, and a cross below it reverses the direction.
• The stated defaults use 50-period and 200-period simple moving averages.
• Exits use percentage targets and stops measured from the average entry price.
• The source includes a BTC/USDT futures backtest setup but reports no results.
• Sideways price action can create repeated false signals, while fixed exits may not suit every volatility regime.

Tags

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