Staged Moving Average Entries for Long Trend Following

Summary

This strategy uses a short simple moving average and three price levels set below it to scale into a long position. It adds one unit as price crosses each successive level, up to three units, and exits the long when price falls below the moving average. The parameters include a three-period average and offsets of 4%, 5%, and 6%. The published backtest setup specifies BTC/USDT futures over roughly one year, but the document gives no performance statistics to evaluate the results.

The approach aims to participate in rising trends through staged entries. Its stated limitations include whipsaws in sideways markets, lagging signals, the risk of adding at increasingly high prices, and the absence of a built-in stop loss. The description also refers to short entries, but the supplied trading logic only shows long entries and exits. Position sizing, transaction costs, and out-of-sample performance are not established, so the claimed drawdown figure should not be treated as independently validated.

Key ideas

• The strategy derives three entry levels by shifting a simple moving average downward by different percentages.
• It adds long exposure in stages as price crosses those levels, with a maximum of three units.
• A cross below the moving average closes the long position in the supplied logic.
• Range-bound markets and delayed signals can cause losses, while no stop loss is implemented.
• The published setup identifies a BTC/USDT futures backtest but provides no detailed performance results.

Tags

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