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Moving Average Crossover

In short

Signal generated when a faster MA crosses a slower MA — classic trend signal

The golden cross (50-day crosses above 200-day MA) is one of the most famous buy signals. The death cross (50-day crosses below 200-day) is a sell signal. It's simple but followed by many professional traders.

MA crossovers compare two moving averages of different periods. When the shorter-period MA crosses above the longer-period MA, it signals upward momentum (bullish crossover). Crossovers lag price action but reduce false signals.

Formula

Signal when SMA(50) crosses SMA(200) or EMA(12) crosses EMA(26)

Related concepts

  • Simple Moving Average (SMA) — Take the last 50 days of prices and average them. That's the 50-day SMA. It smooths out daily noise so you can see the real trend. Price above its SMA = uptrend; below = downtrend.
  • Exponential Moving Average (EMA) — Like a regular moving average but it pays more attention to recent prices. If a stock just had a big move, the EMA reacts faster than the SMA. Traders use EMA crossovers to spot trend changes early.
  • MACD — MACD compares two moving averages to show momentum. When the fast line crosses above the slow line, it's a buy signal. Cross below = sell signal. Like two runners — when the faster one pulls ahead, momentum is shifting.
  • ADX (Average Directional Index) — ADX tells you how strong a trend is on a scale of 0–100. Above 25 means there's a real trend happening. Below 20 means the market is choppy with no clear direction.