Moving Average Alignment with ATR Stops for Trend Trading

Summary

This strategy uses the ordering of several moving averages to classify a market as bullish, bearish, or partly aligned. It combines that assessment with recent highs and lows to set a directional state, then enters in the direction of the trend when price clears an ATR-based stop threshold. The implementation also includes optional filters based on yearly highs and lows, configurable trade direction, and exits through stop orders or opposing signals.

The supplied code exposes choices for the moving-average type, lookback and high-low periods, ATR length, and stop multipliers. Its published backtest settings identify a daily BTC futures run spanning part of 2022 and 2023, but no performance results are supplied. The accompanying description highlights lagging averages and the risk of losses from incorrect trend classification. The backtest configuration is too short to establish robustness across market regimes, and stop behavior and parameter sensitivity would need independent evaluation.

Key ideas

• The strategy gauges trend direction from the alignment of moving averages with different periods.
• Recent directional alignment and high-low conditions determine whether the system favors long or short trades.
• Entries and exits use ATR-based stop levels, with optional closure on a signal reversal.
• Yearly high-low conditions can act as additional filters for trades.
• The document gives a limited backtest setup but no performance results.

Tags

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