Multi-Moving-Average Trend Following with a Volatility Filter

Summary

This framework identifies trends with short-, medium-, and long-period moving averages, with an optional fourth average separating bullish and bearish regimes. Long and short entries require aligned trend conditions, price on the corresponding side of the long-term average, and volatility above a configurable threshold. The strategy also describes partial exits on renewed medium- and long-average crosses, full exits when price crosses the regime line, fixed percentage stops, and equity-based position sizing.

The document offers a broad set of configurable rules but does not provide a complete, untruncated parameter list or backtest results. It flags lagging signals, whipsaws in sideways markets, parameter sensitivity, reversal drawdowns, and the limits of relying only on technical inputs. Suggested extensions include adaptive settings, additional timeframes or momentum measures, volatility-based stops, and forward testing. The strategy's flexibility means its behavior depends heavily on the selected averages, threshold, and position controls; the description alone does not establish robustness.

Key ideas

• Three moving averages define trend direction, and an optional fourth average filters by market regime.
• Entries require trend alignment, price location, and volatility above a chosen threshold.
• The exit plan combines partial closes at trend reversals with full closes at regime-line crossings.
• Position sizing is equity-based and the stop loss is a configurable fixed percentage.
• The document reports no performance evidence and highlights whipsaw and parameter risks.

Tags

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