SMA breakout (Donchian-style) strategyvsPremium/Discount Zones strategy
SMA breakout (Donchian-style) strategy: Buy a fresh push above the 20-bar mean and trail the winner until it folds. · Premium/Discount Zones strategy: Buy the discount extreme, fade the premium extreme, exit at equilibrium.
SMA breakout (Donchian-style) strategy
Buy a fresh push above the 20-bar mean and trail the winner until it folds.
Premium/Discount Zones strategy
Buy the discount extreme, fade the premium extreme, exit at equilibrium.
Indicators
- SMA (period 20)
- Premium/Discount Zones (lookback 200)
Timeframes
Bias
Long only
Long & short
Market fit
Volatility expansion
Range-bound
Entry rules
- Enter long when close crosses above the 20-bar SMA.
- 4-bar cooldown after exit reduces back-to-back whipsaws.
- Long when price is inside the discount zone (current_zone = +1).
- Short when price is inside the premium zone (current_zone = -1).
Exit rules
- Close on a cross back below the SMA.
- Trailing 5% stop catches deeper retracements before the SMA flips.
- Position closes when price returns to equilibrium.
- 4% trailing stop, 5-bar cooldown.
Expected behavior
Trendy growth in directional regimes punctuated by ugly chop when price oscillates around the SMA. Best paired with a higher-timeframe trend filter to skip the chop.
Range trader — fits balanced markets where extremes get bought / faded back to mid. Stacks losses in strong trends that camp at one extreme for many bars.
Complexity
Which one is right for you?
Derived from the bias, timeframe and indicator profile of each strategy — not a back-test forecast.
When to pick SMA breakout (Donchian-style) strategy
- You expect volatility expansion — the thesis is "Buy a fresh push above the 20-bar mean and trail the winner until it folds."
- You want a long-only bot on 1h–1d candles with a balanced rule-set.
- You're comfortable monitoring 1 indicator (SMA (period 20)).
Buy a fresh push above the 20-bar mean and trail the winner until it folds.
When to pick Premium/Discount Zones strategy
- You expect range-bound — the thesis is "Buy the discount extreme, fade the premium extreme, exit at equilibrium."
- You want a long & short bot on 1h–1d candles with a balanced rule-set.
- You're comfortable monitoring 1 indicator (Premium/Discount Zones (lookback 200)).
Buy the discount extreme, fade the premium extreme, exit at equilibrium.
SMA breakout (Donchian-style) strategy
Buy a fresh push above the 20-bar mean and trail the winner until it folds.
Premium/Discount Zones strategy
Buy the discount extreme, fade the premium extreme, exit at equilibrium.
Related comparisons
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