SMA Breakout Entries with Recent-Low Stops and 2:1 Targets

Summary

This strategy uses a 20-period simple moving average (SMA) as a trend reference. It enters long when the close moves from at or below the average to above it. The stop is placed at a recent low, and the profit target is set at twice the entry-to-stop distance. The document describes chart annotations for the average, entry signals, and exit levels, but it specifies no short entry rule.

The narrative refers to a seven-candle low, while the source parameters include a stop-lookback input set to 25 and the code calculates the low over seven candles. The document provides a BTC/USDT futures backtest configuration but no performance figures, so it does not establish profitability. It warns that sideways conditions can produce false breakouts, that a recent-low stop may be wide, and that slippage and parameter sensitivity can affect outcomes. Suggested additions include volume or volatility filters, ATR-based stops, and trailing profit exits.

Key ideas

• A long signal occurs when the closing price crosses above a 20-period SMA.
• The described stop uses a recent low, and the target is twice the stop distance from entry.
• The source calculates the lowest low over seven candles, despite listing a separate stop-lookback parameter with a default of 25.
• No short setup or backtest performance results are provided.
• False breakouts, wide stops, slippage, and parameter sensitivity are identified as risks.

Tags

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