MA200 Trend Filter with Candle-Body Momentum Entries

Summary

This trend-following method pairs a 200-period simple moving average with a comparison of consecutive candle bodies. It buys when price closes above the average and the current candle is bullish with a larger body than the prior candle. It sells short when price is below the average and the current candle is bearish with a larger body. The rules permit a new entry only when no trade is open, and optional exits use fixed stop and target distances, listed as 50 and 100 pips by default.

The document discusses the benefit of requiring both trend alignment and stronger candle movement, along with the risks of a lagging average, fixed-distance exits, and weak performance in ranging conditions. It suggests volatility-adjusted stops, extra filters, and market-state checks as possible refinements. A TRX/USD futures configuration for roughly one year is provided, but no performance metrics are reported. The source’s fixed pip conversion is tied to the instrument’s minimum tick, so the stated distances may not transfer consistently across markets; the available text also does not provide a complete account of all source parameters.

Key ideas

• The long and short entries combine the price’s position relative to a 200-period average with candle direction and body size.
• A signal requires the current candle body to exceed the previous candle body.
• The strategy blocks new entries while a position is open and optionally uses fixed stop and target distances.
• A lagging trend filter and fixed-distance exits may be poorly suited to reversals, changing volatility, or ranging markets.
• The TRX/USD futures test configuration gives no evidence of returns or risk-adjusted performance.

Tags

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