SMA Crossover Entries with Percentage Stops and Profit Targets
Summary
This strategy uses a fast and slow simple moving average to identify possible trend changes. With the stated defaults, the averages use 9 and 21 periods: a fast-average cross above the slow average signals a buy, while a cross below signals a sell. The inputs also include a price source, percentage stop loss and profit target, and risk per trade. Alerts are described for both signal directions. Published settings specify BTC_USDT futures, daily bars, and a May 2023 to May 2024 test window, but no performance results are reported.
The accompanying explanation notes that moving averages lag and may whipsaw in sideways markets, and suggests parameter testing, additional indicators, volatility-based exits, and multiple timeframes. The supplied code has implementation limits: it enters long on a buy signal but does not submit a short entry on a sell signal; the risk-per-trade input is not used to size positions. Its stop and target calculations are attached only to the long entry. The backtest settings alone do not establish that the method is profitable or that risk is controlled as intended.
Key ideas
- A fast SMA crossing above or below a slow SMA supplies the strategy's directional signals.
- The stated defaults are 9 periods for the fast average and 21 for the slow average.
- Percentage stop and target inputs are included, but the code attaches exits only to long entries.
- The sell signal generates an alert but does not submit a short order in the supplied implementation.
- Lag, false crosses, parameter sensitivity, and weak performance in choppy markets are cited as limitations.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.