Moving Average Trend Signals with Ribbon Confirmation and Risk Controls
Summary
This document outlines a trend-following strategy combining fast and slow moving-average signals with a trend ribbon based on price relative to another moving average. It describes configurable position sizing using a portfolio percentage and leverage, plus percentage-based stop-loss and take-profit levels. The example parameters include fast and slow lengths of 5 and 20, a ribbon length of 20, and separate long and short profit targets and stop levels. API parameter fields are provided for automated execution.
The document discusses risks such as whipsaws in volatile markets, losses on sudden reversals, and overfitting from parameter optimization. It recommends testing across market conditions and considering multi-timeframe confirmation, volatility-aware sizing, and diversification. No backtest results are reported. The implementation details also do not fully match the broad description: the visible buy and sell conditions use price and moving-average crossovers, while the ribbon is used for display and is not part of those signal conditions. The stated risk controls therefore require independent verification before practical use.
Key ideas
- Fast and slow moving-average crossovers form the core directional signals.
- The trend ribbon visualizes price movement relative to a moving average but is not included in the shown entry conditions.
- Position size is based on portfolio percentage, leverage, equity, and price.
- Percentage-based stop and target levels are configurable for long and short positions.
- Parameter sensitivity, whipsaws, and abrupt reversals are identified as risks, with no performance results provided.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.