Moving Average Crossovers with Fixed Percentage Stops and Targets

Summary

This strategy uses a short and a long exponential moving average to choose direction: a cross above signals a long entry, while a cross below signals a short entry. Once a position is open, stop-loss and take-profit levels are calculated as fixed percentages of its average entry price. The document gives example parameter settings and describes a backtest configuration for BTC-USDT futures, but it reports no performance statistics or evidence that the settings are profitable.

The approach makes each exit level scale with the entry price and exposes the stop and target percentages as user inputs. Its simplicity also leaves key limitations: moving-average signals can whipsaw, and the selected percentages may be too tight or too wide for a given instrument or timeframe. The document suggests checking different parameter choices and markets, adding filters, and considering trailing exits or position sizing. Fixed percentage levels control exit distances but cannot guarantee a particular realized loss or return.

Key ideas

• A short EMA crossing above or below a longer EMA determines whether the strategy enters long or short.
• Stops and profit targets are set at fixed percentage distances from the position's average entry price.
• The published example provides stop and target inputs and a BTC-USDT futures backtest setup without reporting results.
• Moving-average signals may produce repeated false entries in choppy markets.
• Stop and target distances need evaluation across instruments, timeframes, and volatility conditions.

Tags

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