@TopTrader 01 ๐ฅ
#TechnicalAnalyse Why the 10โ20 SMA Strategy Still Works After 100 Years
Market Wisdom That Still Works
This visual highlights a time-tested trend-following strategy built on a 100-year backtest, using the 10 SMA and 20 SMA (Simple Moving Averages โ not EMA) as dynamic trend guides and stop-loss levels. Its strength lies in simplicity, discipline, and alignment with long-term market behavior.
๐ Core Concept
10 SMA (Fast Line): Best for strong, impulsive trends where price โsurfsโ above the average
20 SMA (Slow Line): Suitable for steady trends, allowing deeper pullbacks without exiting early
Both act as dynamic stop-losses, not just indicators
๐ Key Trading Rules
โ
Trend Following: Stay invested as long as price closes above the SMA
โ
2โ3 Touch Rule: After 2โ3 clean bounces on the SMA, a decisive break = strong exit signal
โ
7-Week Rule:
If price respects the 10 SMA for more than 7 weeks, exit immediately on the first close below it (no hesitation)
โ
Market Condition Filter:
Works best in trending markets
In choppy markets, whipsaws dominate โ cash is king ๐ฐ
โ ๏ธ Warning & Exit Signals
Failed breakouts
Outside reversal candles
First confirmed close below the SMA after prolonged trend strength
๐ซ Critical Reminder: Never rely only on moving averages โ price action confirmation is essential
๐ Strategic Takeaway
This strategy proves that trend discipline beats prediction. By cutting losses early and letting winners run, traders align with long-term market structure rather than emotions. Itโs especially powerful for positional trading in equities, indices, and crypto during strong trends.
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