MACD Trend Strategy with Signal Crossovers and Percentage Stops

Summary

This strategy uses the MACD difference and its smoothed signal line to classify market direction. Crossings of their difference through zero establish bullish or bearish states; changes in which state was most recent then trigger long or short entries. The script tracks the average entry price and places a percentage-based stop for each direction. Its parameters include fast and slow EMA lengths, signal smoothing, and stop-loss size.

The published settings describe a BTC/USDT futures backtest over a one-month period using a three-hour chart period and fifteen-minute base data. No performance statistics or equity results are supplied, so the material explains the rules without demonstrating their effectiveness. The accompanying discussion notes MACD whipsaws, sensitivity to stop placement, fixed sizing and possible overleverage, and the risk of choosing a backtest window that overfits. The source also uses full-equity default sizing, making position and leverage assumptions important to review before interpreting results.

Key ideas

• The strategy derives MACD from the difference between fast and slow exponential moving averages.
• Zero crossings of the MACD-to-signal difference establish bullish and bearish states.
• A change in the latest directional state triggers a long or short position.
• Percentage stops are applied using the position average price.
• The published backtest settings contain no reported performance evidence.

Tags

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