Weighted Moving Average Crossovers with an ATR Profit Stop
Summary
This short-term momentum approach uses weighted moving averages to identify bullish transitions. It enters when a short average crosses above a longer average, or when the averages align in ascending order. A volatility-based stop line, calculated from ATR, supports an exit after the trade has gained enough; a cross back below the long average also closes positions. The source describes staged long entries and a short chart interval, while the published test configuration uses BTC-USDT futures.
The document reports an average holding time of about two hours per trade and a maximum drawdown around 20 percent, but gives no fuller performance record. It cautions that its test covers only about a year, fixed parameters may not generalize, price gaps can defeat stop logic, and fees or slippage may be material. Broader samples, different instruments, parameter checks, position sizing, and transaction-cost analysis are proposed before treating the results as reliable.
Key ideas
- A short weighted moving average crossing above a long average triggers a bullish entry.
- An ascending alignment of short, medium, and long averages can also signal an uptrend entry.
- An ATR-based stop line and a cross below the long average provide exit conditions.
- The reported test cites about two hours of average holding time and drawdown around 20 percent, with a limited sample.
- Gaps, costs, and fixed parameters are important limitations to investigate across longer tests.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.