Two- and Three-Line Moving Average Crossover Strategies
Summary
This strategy framework supports seven moving average types: SMA, EMA, WMA, VWMA, HMA, RMA, and ALMA. Traders can choose a fast and slow line, optionally add a middle line, and select either crossover signals or prior-close position relative to the averages for entries. Long and short trading can also be configured. The published defaults use periods of 50 and 200, with a 100-period middle line when the three-line mode is enabled.
The document explains the intended use of moving average relationships to follow trends, but gives no measured performance results. It identifies delayed signals and repeated false entries in sideways markets as key limitations, and notes that outcomes depend on period selection. Suggested additions include ATR-based position sizing, trend filters, trailing stops, and volume confirmation. The backtest settings specify BTC-USDT futures on a daily timeframe over a historical period, but no results are reported.
Key ideas
- The framework lets users select among seven moving average calculation methods.
- A two-line crossover or a three-line ordering can define trend signals.
- Entries can also be based on the prior close relative to the selected averages.
- Moving average lag and whipsaws in ranging markets are central limitations, and no performance figures are provided.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.