English | September 20, 2024 | ASIN: B0DHPWYF32 | 91 pages | PDF
Strategy 1. What Is a Moving Average Crossover?
A Moving Average Crossover is a popular swing trading strategy used to identify trend reversals and entry or exit points in the market. This strategy involves two or more moving averages—typically a shorter-term moving average and a longer-term moving average. A crossover occurs when the short-term moving average crosses above or below the long-term moving average.
There are two main types of moving average crossovers:
- Bullish Crossover (Golden Cross): This occurs when a short-term moving average crosses above a longer-term moving average, signaling the potential start of an uptrend.
- Bearish Crossover (Death Cross): This happens when a short-term moving average crosses below a longer-term moving average, indicating the possible beginning of a downtrend.
Swing traders often use this strategy because it offers a clear, visual signal to enter or exit trades, reducing the ambiguity that sometimes accompanies market movements.
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