SMA and ATR Bands for Long-Term Trend Entries and Exits

Summary

This long-only trend method enters when the close rises above a long-period simple moving average plus an average true range band, and exits when the close falls below the average minus the band. The stated settings use a 200-period SMA and a 14-period ATR. The SMA sets the broad trend reference, while ATR adjusts the distance of the entry and exit thresholds to recent volatility.

The document describes the bands as a way to filter price noise and manage downside during extended holdings. It also notes lag from the moving average, vulnerability to sudden reversals, and sensitivity to ATR choices. Suggested extensions include testing parameter combinations, adding a reversal indicator, and considering fundamental filters for stocks. Published settings show a BTC/USDT futures backtest on a daily period across roughly a year, but no performance statistics are supplied. The source repeatedly calls an entry while the condition holds, so implementation details and actual trade handling need inspection before assessing results.

Key ideas

• The strategy enters long above the SMA plus an ATR band and closes below the SMA minus the band.
• The stated defaults are a 200-period simple moving average and a 14-period ATR.
• The ATR band makes threshold distance responsive to recent volatility.
• Moving average lag, sudden reversals, and parameter choices are key limitations.
• Backtest settings are provided without performance results.

Tags

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