Moving Average Trend Following with RSI and Stop Exits
Summary
This strategy combines simple moving averages with RSI to identify potential long entries and exits. It calculates averages over several horizons and enters when the shortest average crosses above the 50-period average, RSI is above 30, and at least one of two medium-to-long average comparisons is positive. It exits on a bearish moving-average crossover below the 20-period average, a price-based loss condition, or a trailing stop after price has risen sufficiently from entry.
The document presents this as a trend-following method and discusses familiar limitations: moving-average lag, sensitivity to stop placement, and the possibility that a trailing stop exits too early. The published backtest settings specify BTC/USDT futures over roughly a year, but no return, drawdown, or trade statistics are reported. There is also an inconsistency between the prose and code: the prose cites a 95% entry-price threshold, while the source uses a 7% stop and a separate trigger for activating the trailing stop. Results therefore cannot be inferred from the description alone.
Key ideas
- A short moving average crossing above a longer one provides the basic long-entry signal.
- RSI and comparisons among longer moving averages act as additional entry filters.
- Exits combine a bearish crossover condition, a fixed loss condition, and a trailing stop.
- Moving-average lag and stop placement can cause late entries, frequent exits, or missed gains.
- The stated backtest setup has no accompanying performance results, and the source code's stop logic differs from the prose.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.