Moving Average Crossovers Filtered by Normalized Volatility Position

Summary

The document describes a trend system using a 50-period EMA and 200-period SMA crossover, then filtering potential trades with price relative to the long average and a normalized indicator derived from moving-average and standard-deviation distances. The proposed rule calls for long signals above the 200-period average when the mapped value is below 25, and short signals below it when the value is above 75. The mapping scales recent distance values to a 0–100 range using historical extrema; the example code uses a 504-bar lookback. Fixed take-profit and stop-loss point inputs are also included.

There is a mismatch between the prose and implementation: the code sets a waiting state after a crossover and enters once the price and mapped-value filters are met, rather than requiring the crossover and filters simultaneously. It does not report backtest outcomes; its BTC/USDT futures test window is very short, and the stated long-horizon lookback makes results especially hard to assess from that setup. The document warns of lag, poor fit to ranging markets, and overfitting from threshold tuning.

Key ideas

• A 50-period EMA and 200-period SMA crossover establishes a directional setup.
• Price relative to the long average and mapped distance thresholds filter entries.
• The custom indicator normalizes standard-deviation distances against historical extrema.
• The written signal description differs from the code’s delayed-entry state logic.
• No performance results are reported, and the test window is limited.

Tags

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