Triple Smoothed Moving Average Trend Crossover Strategy

Summary

This trend-following method combines three displaced smoothed moving averages calculated from the high-low midpoint. Its stated defaults use lengths of 5, 8, and 13 bars, with respective displacements of 3, 5, and 8 bars. The strategy takes a long position when the short and medium averages cross above the longer averages in sequence, and a short position on the opposite alignment. A reverse-trading option is included.

The document explains the rationale for using several horizons to assess direction and suggests that displacement may help distinguish stronger moves. It also describes plotting the averages and changing the trade direction as available options. The published configuration specifies a BTC/USDT futures backtest on Binance from late September to late October 2023, but gives no performance results, so it does not establish profitability. The notes warn that crossover signals can lag or fail, parameters need tuning, and additional filters and stop-loss rules may be needed. The supplied source’s position logic also includes price relative to the short average, so its actual entry conditions are more specific than the overview alone suggests.

Key ideas

• The strategy uses three displaced smoothed moving averages of the high-low midpoint to assess trend alignment.
• Its defaults use short, medium, and long lengths of 5, 8, and 13 bars, with displacements of 3, 5, and 8 bars.
• The described signals favor long positions on bullish alignment and short positions on bearish alignment, with optional reversal.
• Crossover signals may lag or whipsaw, and the document recommends parameter tuning, additional filters, and stop-loss planning.
• A BTC/USDT futures backtest configuration is provided, but no performance results are reported.

Tags

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