MA5 Entry Rules With Entry-Price Exits and a Distance Filter

Summary

This short-term strategy uses a five-period simple moving average as a reference for long entries. It describes buying when a new candle opens above the average, or when it opens below the average by a stated distance threshold. Positions are closed when the candle closes at or above the average entry price, or after a specified loss relative to entry. The published test settings identify BTC/USDT futures and a daily chart over roughly one year, but no returns, trade counts, or other results are provided.

The document presents the distance filter as a way to reduce noisy signals and identifies reliance on one indicator, frequent trading costs, and fixed stop levels as limitations. There is a notable inconsistency in the second entry rule: the prose says the opening price must be below the average and sufficiently far from it, while the code tests whether the price-minus-average difference is positive. Those conditions cannot both hold. The text also calls the method a dual moving-average crossover, although the described rules use a single average.

Key ideas

• The strategy uses a five-period simple moving average to define two proposed long-entry scenarios.
• The described exits occur at or above average entry price, or after a 0.1% decline from entry.
• The second entry rule has a sign inconsistency between the prose and the code condition.
• The provided backtest settings specify BTC/USDT futures on a daily chart, but give no performance results.
• The document flags single-indicator dependence, trading costs, and fixed stop levels as limitations.

Tags

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