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What does moving average crossover mean?
trading
- 8 Answers
- In Technical Analysis
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- Warren
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- 1 year ago
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Generacially, this is called the "Crossover Rule" and applies to many technical indicators. Below is how InvestorWords.com explains it: Source(s): http://www.investorwords.com/6469/ crossover_rule.html |
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The 10 and 20 day averages are both short-term averages, and so their crossovers will be of less value, or of a less meaningful signal to exit or buy a position, than the crossover of the intermediate term and long term averages. If you are a trader, then yes, you might want to pay attention to the 10 and 20 day crossover, but if you are a long-term investor trying to build a winning portfolio, then you are going to be whipped around left and right and buffetted with so many signals from the chart that you won't know what to do. In other words, the 10 and 20 day moving averages will cross perhaps once a month or once every two months or sometimes even more than that if the stock is volatile. |
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Traders use a combination of slow and fast moving averages in trading. A trading signal is generated when the two cross each other and hence the name crossovers.Next to trendlines, moving averages are the most widely used technical indicators. So when using moving average crossovers, when the short period average is above the long period average, you should be long. Similarly when the short period average is below the long period average, you should be short. Source(s): http://www.howtoinvesttoday.com/2010/03/24/ mastering-moving-average-crossover-secrets-can-be- highly-profitable/ |
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In technical analysis, the use of moving averages to spot changes in the market trend. A moving average crossover occurs when a faster (shorter) moving average crosses a slower (longer) moving average. |
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Moving average crossover usually indicate change of trend when a lower period moving average cross over a lager moving average. |
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A bullish signal is generated when the shorter moving average crosses above the longer moving average. A bearish signal is generated when the shorter moving average crosses below the longer moving average. |
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Is when you are using a combination of 2 moving averages in your analysis and When the faster one crosses over the slower one it generates a signal that there may be a shift in momentum |
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It means the trend is likely goin to change.. If its upwards, then its gonna be downwards and viceversa. |
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