SMA Crossover Trading Strategy
This strategy generates trading signals based on crossover between two SMA lines of different periods. A long signal is triggered when the faster SMA crosses above the slower SMA. A short signal occurs when the faster SMA crosses below the slower SMA.
Some key benefits of this strategy:
However, some potential limitations exist:
Some ways to enhance the strategy:
Overall, the SMA crossover method works well in trending markets but must be traded cautiously during choppy periods. Incorporating stop loss and proper risk management can reduce downside risks.
/*backtest start: 2023-08-11 00:00:00 end: 2023-09-10 00:00:00 period: 10m basePeriod: 1m exchanges: [{"eid":"Futures_Binance","currency":"BTC_USDT"}] */ //@version=3 strategy("SMA Crossover demo", overlay=true) shortCondition = crossover(sma(close, 34), sma(close, 4)) if (shortCondition) strategy.entry("Sell/Short", strategy.short) longCondition = crossunder(sma(close, 34), sma(close, 4)) if (longCondition) strategy.entry("Buy/Long", strategy.long)