Trend Following with Moving Average Envelope — Simple Mechanical System
MA Envelope (20 SMA ± 2.5%): buy above upper band, sell below lower band. Mechanical system. Slightly trails in bulls but massively outperforms in bears.
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Trend Following with Moving Average Envelope — Simple Mechanical System
Moving Average Envelope strategy: calculate 20 SMA, then add/subtract 2.5% for the upper and lower bands. Buy when price closes above upper band (breakout strength). Sell when price closes below lower band (breakdown). Simple, mechanical, no discretion needed. Backtested on SPY over 20 years: slightly underperforms buy-and-hold in bull markets but massively outperforms in bear markets by getting you to cash.
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