Three Moving Average Alignment with Fixed Profit and Loss Exits

Summary

This long-only strategy uses three simple moving averages with default periods of 50, 100, and 200. It seeks an entry when the fast and slow averages are both above the middle average, a configuration the accompanying explanation interprets as a transition from a quiet range into an uptrend. The stated exit levels are a profit target 8% above entry and a stop 4% below entry. Published backtest settings identify BTC/USDT futures over a short December 2023 interval, but the document reports no performance results.

The description recommends testing alternative average periods, adding volume confirmation, and adapting exit distances to conditions. It warns that false breakouts, reversals, and poorly chosen thresholds can undermine results. The source code’s actual entry condition checks the two averages against the middle average rather than requiring the sequential crossovers described in the prose. Its exit condition also combines price thresholds with the date window in a way that may not match the stated rules, so the implementation should be checked before evaluation.

Key ideas

• The strategy uses three simple moving averages to identify an upward alignment.
• The stated long entry requires the fast and slow averages to exceed the middle average.
• The described exits target an 8% gain or limit loss to 4% from entry.
• Volume confirmation and parameter testing are suggested as possible refinements.
• The source’s entry and exit logic do not fully match the written explanation.

Tags

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