SMA stands for simple moving average.
Read from the start: chapter 1 The RuleLeveraged ETFs can lose a large part of their value in a short time.
The rule is simple. What is hard is keeping it for years, and one well-known reason for that has a name.
Whipsaw fatigue. A whipsaw is a switch that is reversed shortly afterwards. In sideways markets the rule switches often: sell, buy back higher shortly after, sell again. Each single switch is small; three or four in a row feel like a fault in the system.
That is where staying with it is hardest.
Against it there are two tools, the buffer and the confirmation days; both remove switches close to the line, one through distance, the other through time.
The histogram counts the signals per calendar year across the long history, purchase and sale one each, at the window length of the standard version.
The x-axis carries the years, the y-axis the number of signals in that year. With the switcher you see how the bars per year change when the buffer grows.
The streak. In the tracker, LETF.io counts how long you have answered the due notifications in time. Answering means confirming or declining; both keep the streak, as long as it happens inside the deadline.
If your answer comes late, that is a missed window. Twice a year a rescue catches you, so that a holiday or an illness does not cost the whole streak; after that it starts again.
So the streak does not measure whether you made money, but whether you stayed with it. That is the part in your hands.
Frozen trackers. When we can no longer evaluate a version reliably, for instance because data is missing, we freeze it instead of guessing. A frozen tracker stays readable but produces no more notifications, and you get a message with the reason.
Two questions about this are in the chapter FAQ: what a missed signal means for the rule, and how to tell whether a period was long enough to judge the rule at all.
Typical Mistakes
Most problems arise not from the rule but from how it is carried out.
The most common mistake is reading the filter as loss protection. It limits participation in long declines, not in sudden shocks. Between the high and the signal you are fully invested.
The second most common is following the rule halfway. A skipped signal, a window length changed afterwards, a savings plan that keeps running while the rule has sold: after that you no longer know what you are actually testing.
The third is wanting to invent a second rule below the line. While the market is below the line, your money sits quietly; the rule asks for nothing more.