Trend Signals from Recursively Smoothed Moving Averages
Summary
This strategy smooths closing prices by repeatedly applying a selected moving average. It offers several average types, including simple, exponential, weighted, and adaptive variants, and can optionally use Heiken Ashi closing prices as the input. The strategy goes long when the smoothed average turns upward and short when it turns downward, using a change in slope to identify local reversals.
The document describes configurable average length, smoothing passes, and a backtest setup for BTC/USDT futures, but reports no performance statistics or comparative results. It warns that repeated smoothing can delay signals, that a moving-average-only method may struggle in ranges, and that transaction costs and absent stop-loss rules can impair live results. Suggested extensions include testing parameter combinations, adding other indicators, restricting trading hours, and setting explicit risk limits.
Key ideas
- The strategy smooths closing prices by recursively applying a selected moving average type.
- Heiken Ashi closing prices can optionally serve as the smoothing input.
- A change in the smoothed average's slope produces long or short signals.
- Length, average type, and number of smoothing passes are configurable.
- Smoothing can delay reversals, and the described rules omit stop losses and transaction costs.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.