Dual-SMA Trend Crossovers with ADX and ATR-Based Exits
Summary
The strategy enters when a fast simple moving average crosses a slow one, using an ADX threshold to filter for stronger trends. The described default SMA lengths are 10 and 21, with an ADX threshold of 20. It sets a stop distance from the current ATR and places the take-profit target at a configurable multiple of that distance; the stated default risk/reward ratio is 2:1. The source also plots the resulting stop and target levels.
The document discusses moving-average lag, false signals, ATR spikes, and the possibility of excessive trading in choppy conditions. It suggests ideas such as multi-timeframe confirmation, dynamic sizing, and trailing exits, but these are proposals rather than features shown in the supplied source. Published backtest settings use ETH/USDT futures on four-day bars over roughly a year. No performance statistics or trading-cost assumptions are given, so the backtest configuration does not establish profitability. The source implements SMA, ADX, and ATR logic; broader claims about multi-market reliability are not supported by reported evidence here.
Key ideas
- A fast/slow SMA crossover creates directional entries when ADX meets its threshold.
- ATR sets the stop distance, and a configurable multiple determines the target distance.
- The stated default target-to-stop ratio is 2:1.
- The document warns about lag, false signals, extreme ATR values, and overtrading.
- Backtest settings are specified, but no performance results or trading-cost assumptions are reported.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.