Shorting Below the 200-Day Average After Consecutive Rising Closes

Summary

The document describes a short-selling rule set for equities and indices. It opens a short position when the close is below the 200-day moving average and closes have risen for four consecutive days. The position is exited when the close falls below the five-day moving average. The stated rationale is to enter during a broader downtrend after a short-term rebound, then cover when price weakens relative to a faster average. The example disallows cumulative orders and uses a fixed share quantity.

The author claims the approach works across many indices and shares, particularly the CAC 40, but supplies no backtest, sample period, transaction-cost assumptions, or performance figures to substantiate that claim. The entry wording and code also appear inconsistent about the count of rising closes, so the precise condition should be checked before implementation. The document suggests pairing the short system with a bullish-market buying strategy, but gives no rules for that companion approach. Market, execution, and risk controls remain unspecified.

Key ideas

• The short entry requires price below a 200-day average and a sequence of rising closes.
• The exit occurs when price closes below its five-day moving average.
• The approach aims to short rebounds within a broader downward trend.
• The document asserts broad applicability but provides no supporting backtest evidence.
• The written entry condition and code should be reconciled before use.

Tags

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