SMA Trend Entries with Fixed Percentage Stops and Targets

Summary

This strategy enters long when the closing price crosses above a simple moving average, then sets a stop below entry and a take-profit level above it. The published example uses a 200-day SMA, a 2% stop and a 1% target. The position closes when either threshold is reached. The note presents the approach as an accessible way to combine a trend signal with predefined per-trade exit levels.

The description calls the exits trailing, but the supplied rules calculate both levels from the average entry price, so neither level moves as price advances. No performance evidence is provided; the published backtest settings identify BTC/USDT on Binance over a short period but give no results. The document flags whipsaws in sideways markets, SMA lag, static stops that ignore volatility, and omitted fees and slippage. It recommends testing parameters, adding volatility-aware stops, and including trading costs in evaluation.

Key ideas

• A close crossing above the SMA triggers a long entry.
• The stop and target are fixed percentages of the entry price in the supplied rules.
• Either threshold closes the long position.
• Sideways markets, lagging signals, volatility changes, and trading costs can weaken results.
• The document provides backtest settings but reports no performance results.

Tags

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