Precision SMA
Precision SMA is a stricter cousin of SMA Crossover: it doesn't just check whether the short average is above the long one, it requires an actual crossover event to have just happened, and …
Precision SMA is a stricter cousin of SMA Crossover: it doesn't just check whether the short average is above the long one, it requires an actual crossover event to have just happened, and it requires price to still be close to the average it's crossing rather than having already run away from it. The "precision" in the name is that tolerance band - it filters out crossovers where price has gapped too far from the trend line to call it a clean entry.
How it trades
| Ingredient | Meaning |
|---|---|
| CROSSOVER(SMA(short), SMA(long)) | An event: short average was at-or-below the long one last candle, and is above it now |
| Entry tolerance band | Close must be within entryTolerancePct% of SMA(short) - not already run away from the trend line |
| CROSSUNDER(SMA(short), SMA(long)) | The mirrored event: short average was at-or-above, now below |
| Exit tolerance band | Close must be within exitTolerancePct% of SMA(long) |
Buy:
CROSSOVER(SMA(short), SMA(long)) AND |Close - SMA(short)| / SMA(short) <= entryTolerancePct%
Sell (only when already in a position):
CROSSUNDER(SMA(short), SMA(long)) AND |Close - SMA(long)| / SMA(long) <= exitTolerancePct%
When it works best
Works best in a market with clean, decisive trend changes rather than a slow grind - the entry tolerance band means this strategy specifically wants to catch the crossover close to where it happens, rejecting entries where price has already moved well past the short average by the time the crossover confirms. That makes it more selective than a bare SMA Crossover (fewer, tighter entries) at the cost of missing crossovers that happen on a large gap or a fast single-candle move - exactly the kind of move the tolerance band is designed to filter out as "already run away," even though such moves are sometimes the start of the strongest trends.
Backtest this strategy yourself
Build these rules on the Free plan, adjust them, and see how they would have traded.