58# High Five Trading System
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High Five strategy employs five simple moving averages to find a setup and a price move in the direction of the setup to define a trigger. The default value for the base moving average is five, and the next four averages are each twice the length of the previous average; thus, with a base average of five, the rest of the averages in the series are 10, 20, 40, and 80.
(The rules for selling short are analogous to buying long; we'll just describe the rules for the long side of the market here.) A buy setup is in place when all five moving averages are greater than they were one bar ago. The entry trigger is a price move equal to the close plus 50% of the setup bar's range. In other words, when all five moving averages are rising at the close of the previous bar, we'll buy at that close plus half of the difference between the bar's high and low. We'll exit our long position on the next open when at least three of the moving averages are declining. As with many of our other strategies, the entry setup and the exit are based on similar conditions, but the exit is more sensitive than the entry. In High Five, we require all five moving averages to be rising for a buy setup, but only three of the averages to be declining to signal an exit.
Time Frame: 1H, 4H and daily.
5 ,10, 20, 40, 80 SMA.
Long and Short Setups
a) If all five moving averages are rising, we have a setup to buy.
b) If all five moving averages are declining, we have a setup to sell short.
Long and Short Triggers
a) The trigger for a long position is when 5SMA> 10, 20, 40, 80 SMA.
b) The trigger for a short position is when 5SMA<10, 20, 40, 80 SMA.
Long and Short Orders
a) Place a buy stop order to enter a long position.
b) Place a sell stop order to enter a short position.
Long and Short Exits
a) Exit long and short positions at an Stop or an Trailing Stop
b) Exit long positions on the next open when at least three of the five simple moving averages turn down
c) Exit short positions on the next open when at least three of the five simple moving averages turn up
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