Trend Following by Requiring Agreement Across Five Moving Average Types

Summary

This strategy seeks directional trends by requiring five moving average types—simple, exponential, smoothed, weighted, and volume-weighted—to slope in the same direction. The description says it calculates fast averages over 8 periods and slow averages over 144, entering long when both sets rise and short when both sets fall. It argues that agreement across different smoothing and weighting methods may filter some market noise, while acknowledging that the combined signals can lag the start of a trend.

The published code does not clearly implement the described fast and slow sets: it derives a single length by subtracting the fast lookback from the slow lookback, then calculates each average at that length. Its entries depend on all five series rising or falling from the prior bar. No backtest results or market-specific evidence are provided. The document recommends testing other parameter combinations and adding confirmation, but presents the method as a basic trend-following framework rather than a validated performance claim.

Key ideas

• The method requires five moving average types to slope together before taking a directional position.
• The prose describes fast and slow lookbacks of 8 and 144 periods.
• The source calculates each moving average using the difference between those lookbacks, rather than separate fast and slow averages.
• Agreement across differently weighted averages may filter some noise, but can delay entries.
• No backtest results are provided, and the suggested next steps include parameter tests and additional confirmation.

Tags

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