Multi-SMA Pullback Entries with DMI Trend Confirmation

Summary

This trend-following system combines five simple moving averages with slope checks, price location, pullback signals, and Directional Movement Index confirmation. It uses the 20- and 200-period averages as its main trend filters: both slopes and their relative ordering must support the trade direction, and price must be on the corresponding side of both averages. A close crossing back over the 20-period average after a pullback can trigger a long when +DI exceeds -DI; the reverse conditions trigger a short. Stops are placed at the lowest low or highest high across the prior ten periods.

The document describes the design and lists example defaults, including a five-period slope lookback and a 14-period DMI, but it reports no backtest outcomes. Its published settings cover ETH/USDT futures on ten-minute bars for several days. The approach may lag reversals, misread temporary average breaks, and perform poorly in ranges; swing-based stops can also be wide. Suggested volatility filters, profit-taking rules, sizing changes, and higher-timeframe checks are possible extensions, not validated results.

Key ideas

• The strategy uses five SMAs, with the 20- and 200-period averages defining its main trend structure.
• Both average slopes, their ordering, and price location must support the trade direction.
• A close crossing back through the 20-period average provides the pullback entry trigger.
• DMI direction confirms entries, and recent swing extremes set stop levels.
• The document gives no performance evidence and flags lag, ranging markets, false breaks, and wide stops as risks.

Tags

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