SMA Trend Reversals with Adaptive Thresholds

Summary

This TradingView study builds a smoothed price measure from short simple moving averages, then uses upper and lower bands with a configurable percentage factor to identify trend changes. It maintains a trend state: in an uptrend, a sufficient decline below the stored upper reference switches the state down; in a downtrend, a sufficient rise above the lower reference switches it up. Signals appear when that state changes, with long entries on upward switches and short entries on downward switches.

The published settings describe a BTC/USDT Binance backtest using four-hour bars from May 2021 to May 2022, with a 15-minute base period. The document provides no performance results, so it does not establish profitability or robustness. The source is an indicator-style script that also issues strategy entries, but it does not specify position sizing, commissions, or slippage. The fixed factor and smoothing choices may behave differently across assets and price scales, and the strategy should be assessed with realistic execution assumptions.

Key ideas

• The trend state changes when price-derived references cross a threshold scaled by the configured factor.
• An upward state change generates a long signal, while a downward change generates a short signal.
• The price measure is smoothed using short simple moving averages and a configurable longer averaging length.
• The published BTC/USDT test settings include no performance statistics or execution-cost assumptions.

Tags

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