SMA Strategy [MK]

3 дня назад

Overview

This strategy is a momentum-based trend-following system designed to capture sustained market moves while minimizing "whipsaws" often found in sideways markets. It utilizes a dual-SMA filter for trend direction, a precise price-crossover trigger for entry, and the Average Directional Index (ADX) to gauge market strength.

How It Works
The strategy follows a strict "Trend + Momentum + Strength" hierarchy:

1. Trend Identification (The Filter) The script uses a Fast SMA (20) and a Slow SMA (50).

Long Bias: SMA-20 > SMA-50.

Short Bias: SMA-20 < SMA-50.

2. Precise Entry (The Trigger) Unlike strategies that enter simply because the price is above a line, this script requires a Price Crossover.

Long Entry: Price must actively cross from below to above the SMA-20.

Short Entry: Price must actively cross from above to below the SMA-20.

3. Trend Strength (The ADX Gatekeeper) To solve the problem of sideways markets where moving averages run parallel, we’ve integrated the ADX (Average Directional Index). The strategy will only trigger a trade if the ADX is above a user-defined threshold (default is 25), ensuring we only enter when the market is trending.

4. RSI Safety Filter To prevent "buying the top" or "selling the bottom," the RSI checks for overextended conditions. It prevents long entries if the RSI is already overbought and short entries if it is oversold.

Exit Logic
The strategy features three layers of protection:

Trend Reversal Exit: Closes the position if the price crosses back over the SMA-20 while the macro trend (SMA-20/SMA-50) has flipped.

Fixed Take Profit: A percentage-based target to lock in gains during sharp moves.

Fixed Stop Loss: A percentage-based safety net to protect capital.

Key Features
Directional Selector: Choose between "Long Only," "Short Only," or "Both."

Visual Feedback: Background colors highlight "Trending" (Green) vs "Sideways" (Red) market regimes.

Fully Customizable: All lengths and thresholds for SMAs, RSI, and ADX can be adjusted to fit different assets and timeframes.

Instructions for Use
Timeframe: This strategy is optimized for trending timeframes such as the 1-Hour (1H), 4-Hour (4H), or Daily (D). Using it on very low timeframes (1-minute or 5-minute) may increase the number of false signals due to market noise.

Asset Classes: Best suited for high-volume assets like Major Forex Pairs, Large-Cap Stocks, and Blue-Chip Cryptocurrencies.

Parameter Tuning: Use the "Strategy Tester" to find the ideal ADX Threshold for your specific asset. Volatile assets usually require a higher ADX (30+) to filter out fake breakouts.

Disclaimer
Financial Risk Warning: The script provided is for educational and informational purposes only. Trading involves significant risk, and there is always the potential for loss. Past performance, whether simulated or real, is not a guarantee of future results.

The author of this script is not a financial advisor. This indicator is not a signal service or a recommendation to buy or sell any security. Always perform your own due diligence and test any strategy thoroughly on a demo account before risking live capital. By using this script, you acknowledge that you are solely responsible for your trading decisions and any resulting financial outcomes.

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Информация о релизе

Overview
This strategy is a refined version of a dual-Moving Average crossover system. Unlike standard crossover indicators that often fail when price "jumps" over a level during a market gap, this script uses Gap-Resistant Logic to ensure signals are captured even when the price skips the SMA line entirely.

Key Features
Gap-Resistant Detection: Standard ta.crossover logic requires price to physically intersect the line. This script monitors the relationship between the previous close and the current close relative to the SMA 20, ensuring "jump" entries are never missed.

Trend Alignment: Long entries only occur when the Fast SMA (20) is above the Slow SMA (50), and Shorts occur when it is below, ensuring you trade in the direction of the broader trend.

RSI Overextended Filter: Prevents entering "Long" when the RSI is already too high or "Short" when it is already too low, helping you avoid buying the top or selling the bottom.

Intraday Auto-Close: Built-in logic to flatten positions before the market close (customizable to your specific timezone).

How to Use
Trend Confirmation: The user should exercise discretion regarding the "Gap" between the two SMAs. Wider gaps typically indicate stronger momentum.

Intraday Trading: Designed primarily for intraday charts (1m, 5m, 15m). Ensure the User Timezone and Exit Time matches your local exchange hours.

Risk Management: The strategy includes a default 2% Stop Loss and 5% Take Profit. These can be adjusted based on the volatility of the asset.

Technical Logic
Long Entry: Price moves from below to above SMA 20 + SMA 20 is above SMA 50 + RSI is below the user-defined threshold.

Short Entry: Price moves from above to below SMA 20 + SMA 20 is below SMA 50 + RSI is above the user-defined threshold.

Exits: Triggered by the hard Stop/TP levels or a "Trend Exit" where price crosses back over the SMA 20 in the opposite direction.

Settings Guide
Strategy Direction: Choose "Long Only", "Short Only", or "Both" depending on your market bias.

Timezone: Enter your local timezone (e.g., UTC+5:30 for IST) to ensure the EOD auto-close works correctly.

RSI Max/Min: Adjust these to be more or less aggressive (e.g., setting RSI Max for Long to 80 allows for more entries in strong parabolic trends).

Change Log / Version Updates
Logic Optimization: Removed the hard-coded "Price Gap" (Yellow Diamond) indicators and ADX trend filters to provide a cleaner chart and allow for more user discretion.

Gap-Resistant Execution: Switched from ta.crossover to a state-based comparison. This ensures that if the market opens with a significant gap up/down that skips the SMA 20, the strategy still triggers an entry.

Intraday Refinement: Updated the auto-close logic to utilize Pine Script v6 standards for better timezone handling.

Visual Cleanup: Simplified the interface by removing "Gap Expansion" calculations, focusing strictly on the price action relative to the 20 and 50 SMAs.