Moving Average Crossovers with Progressively Weighted DCA

Summary

This strategy combines a fast and slow moving average crossover with dollar cost averaging. It offers SMA, EMA, or HMA choices for the averages; an upward crossover starts a long position, followed by additional safety orders as price declines. Each safety order is placed farther down from the preceding one and uses a progressively larger allocation. The described exits use a profit target based on the base position’s average price and a stop tied to the latest safety order’s price.

The document lists configurable order sizes, safety order count and spacing, scaling factors, and profit and loss settings. It publishes backtest settings for BTC/USDT futures from late 2022 to late 2023, but gives no performance results, so it does not establish profitability. Its own risk discussion notes that volatile price swings can trigger repeated averaging, while moving average and exit parameters need testing. The parameters and source describe a long-only configuration, despite some general text about sell signals and per-position exits.

Key ideas

• Fast and slow moving averages can use SMA, EMA, or HMA crossovers to initiate a long deal.
• Safety orders are added as price falls, with successive orders placed at wider intervals and given larger allocations.
• The profit target is tied to the base position’s average price, while the stop is tied to the latest safety order.
• The document recommends testing indicator and exit parameters and considering forced exits based on drawdown or holding time.
• The published BTC/USDT futures backtest settings do not include performance results.

Tags

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