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Moving Average Cross
Definition
The Moving Average Cross employs three Moving Averages (typically 20, 50, and 200 periods Simple Moving Averages by default) to signal shifts in market trends. When a shorter-term moving average crosses above a longer-term moving average, it often indicates an upward trend, and vice versa.
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Suggested Trading Use
Watch for the moments when the shorter moving averages cross the longer ones. If the 20-period moving average crosses above the 50-period or 200-period moving averages, it's often seen as a bullish sign, and you might consider entering a long position. On the flip side, if the 20-period moving average crosses below the longer ones, it could be a bearish signal, suggesting it might be time to sell or enter a short position. Utilize these cross signals to time your entries and exits more effectively.