SMA Crossover Entries with Fixed Percentage Exits

Summary

This strategy uses a short and long simple moving average to identify directional changes. A cross above triggers a long entry when no position is open, while a cross below closes the long. Its defaults are 7 and 40 periods, with a stop 1% below entry and a profit target 2% above entry. The script plots both averages and the exit levels for chart monitoring.

The document describes the rules and configurable parameters, but provides no performance results or evidence that the approach is profitable. It identifies familiar limitations: moving averages react late, crosses can whipsaw in sideways markets, and fixed percentage stops may not fit changing volatility. Suggested extensions include trend strength filters, volatility-linked stops, and volatility-based position sizing. The source and backtest settings concern BTC/USDT futures on hourly bars over a short historical interval, but no backtest outcome is reported.

Key ideas

• A 7-period SMA crossing above a 40-period SMA triggers a long entry when flat.
• A downward crossover closes the long position.
• The default exit levels are a 1% stop loss and a 2% take-profit measured from entry.
• The document warns that lagging averages may produce delayed or false signals in volatile and range-bound markets.
• No strategy performance results are supplied.

Tags

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