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NotAnotherSMAOffsetStrategyModHO: Strategy Explained

1. What Does This Strategy Do?​

One-Line Summary​

"Buy cheap when trend is up, sell when trend weakens." Think of it like supermarket shopping — only buy when the price is below the average, and only sell when the price rises above average.

Name Meaning​

NotAnotherSMAOffsetStrategyModHO broken down:

  • "NotAnother": Not just another ordinary strategy
  • "SMA": Moving average (but uses EMA)
  • "Offset": Price must deviate from MA by a percentage
  • "ModHO": Modified + Hull Optimization

2. Core Logic in Plain English​

The Strategy's Approach​

Imagine you're at a supermarket. The strategy:

  1. Finds the "fair price" — using EMA
  2. Waits for discounts — price must be at least 1.6% below fair price (offset 0.984)
  3. Checks the "trend direction" — using EWO
  4. Buys when conditions are met
  5. Sells when price is above fair price and trend weakens

3. When to Buy? Two Signals​

Signal 1: "Buy the Dip" (ewo1)​

When: Uptrend still intact, but price pulled back.

Conditions:

  1. Fast RSI < 35: Short-term oversold
  2. Price < EMA × 0.984: 1.6% below average
  3. EWO > 3.206: Strong upward momentum
  4. RSI(14) < 63: Not overheated
  5. Volume > 0
  6. Price not too high vs sell line

Example: BTC climbing steadily from $50k to $55k, suddenly drops to $54k. Strategy buys the dip.

Signal 2: "Bottom-Fish" (ewo2)​

When: Price crashed hard, EWO deeply negative.

Conditions:

  1. Fast RSI < 35
  2. Price < EMA × 0.984: 1.6% below average
  3. EWO < -10.69: Very bearish
  4. Volume > 0
  5. Price below sell line

Example: BTC crashed from $55k to $45k. Strategy catches the bottom.

4. When to Sell? Two Conditions​

Condition 1: Profit Target Hit​

When: Price rose and momentum still strong.

Conditions:

  1. Price > SMA 9
  2. Price > sell EMA × 1.0: Above baseline
  3. RSI > 50: Still bullish
  4. Fast RSI > Slow RSI
  5. Volume > 0

Plain English: Made money, trend still healthy, time to take profit.

Condition 2: Trend Weakening​

When: Price dropped but still above baseline.

Conditions:

  1. Price < HMA 50: Broke below mid-term trend
  2. Price > sell EMA × 1.002: Still above baseline
  3. Fast RSI > Slow RSI

Plain English: Trend may change, still profitable — take the money.

5. Risk Control — Three Layers​

Layer 1: Stop-Loss (32% Max)​

Bought at $100 → drops to $68 → forced sell.

Layer 2: Trailing Stop​

Activates at 3% profit. Stops follow price up at 0.75% below peak.

Layer 3: Take-Profit Target (21.4%)​

Goal is 21.4% profit. If buy signal still active, may hold longer.

6. Parameters Summary​

ParameterDefaultMeaning
low_offset0.984Buy when 1.6% below MA
ewo_high3.206Must be in uptrend to buy
ewo_low-10.69Bottom-fish threshold
high_offset1.002Sell when slightly above MA

7. Pros & Cons​

Pros: Clear logic, risk controlled, multiple signals Cons: Wide 32% stop-loss, needs parameter tuning, no shorting

8. Summary​

"Buy when price is cheap in an uptrend, sell when price recovers or trend weakens. Three layers of risk protection."

Best for: Trend-following traders who understand indicators and accept moderate risk.