SMATrail

Concept

The SMA-Trail Position Manager ties stop-loss placement directly to a Simple Moving Average (SMA). Instead of using fixed distances or volatility-based ranges, the stop adjusts dynamically based on the distance between price and the SMA. This creates a trailing mechanism that locks in profit while following the underlying trend.

Idea

The principle is simple: if price trades above the SMA, the SMA serves as a dynamic support level; if price trades below, it acts as resistance. By setting the stop at the pip distance between the SMA and the current price, the strategy ensures that stops follow the trend closely. Since no take-profit is set, trades are allowed to run as long as the trend continues, exiting only when the SMA is breached.

How it works / Interpretation

• Initial Stop-Loss: Calculated as the absolute difference (in pips) between the SMA and the entry price.
• Trailing Stop: Updates continuously as the SMA moves with price, ensuring profits are locked in while trends persist.
• Take-Profit: Not defined — exits are managed exclusively via the SMA stop.

Parameters adapted by the genetic algorithm

SMA period length (e.g., 20): defines how fast or slow the trailing stop reacts to price changes.

Price type used for SMA calculation (Close, Open, High, Low).

The Genetic Algorithm can fine-tune the SMA period to make the trailing stop tighter in fast-moving markets or looser in smoother trends, optimizing the balance between profit protection and trade longevity.

Best suited for

Trending markets, where price respects the SMA as dynamic support/resistance.

Particularly strong in steady, directional moves where traders aim to capture extended runs.

Less effective in choppy or sideways conditions, where frequent SMA crosses can trigger premature exits.

Pros & trade-offs

✅ Lets winners run without a fixed profit cap.

✅ Dynamically adapts to the underlying trend.

⚠️ In sideways or volatile conditions, SMA “whipsaws” can trigger early exits.

⚠️ No fixed TP means trades can give back profits if trends reverse sharply.