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200 vs 50 Day Moving Average Crossover Strategy

simple moving average crossover strategy
Enter trades. Let them play out. Profit.

Those are the goals of trading.

But if you have never traded before — or maybe you are not profitable yet — those seven little words can be extremely intimidating.

Trading is not as easy as it sounds.

Here is the good news: While it can be difficult to trade, it is not impossible.

This best moving average crossover for swing trading uses the 200 day moving average golden rule and the 50 day moving average. This strategy should be used to define the current big picture trend and also give you an idea when to go long or short. 

It is one of the most profitable moving average forex strategies when traded correctly.

The moving average is the most popular trading indicator used by traders.

Important: Do not simply go short or long when you get the crossover, price action will be extended so it is better to wait for a retrace to a resistance or support area before you take the entry.

Here is how to trade the moving average crossover strategy to trade successfully.

How To Trade The Moving Average Crossover

2 Moving Average Crossover Strategy Explained

The moving averages we will look at is the simple moving average 50 periods and the 200 periods and as you can see in the example below when we have a downtrend the 50 moving average will be below the 200 moving average and when we have an uptrend the 50 moving average will be above the 200 moving average. You can easily set up these moving averages on a charting platform.

You can see that the 200 moving average is the blank line and the blue one is the 50 moving average.
200 day moving average rule
The 50 moving average is adopting faster to new price movements so it follows price faster if we have a quick down move the 50 moving average will start sloping faster and steeper than the 20 moving average will.

These are the best moving average for forex trading since they can be used for both support and resistance levels and as trend indication. 

One of the best moving average strategy is the crossover strategy namely the golden cross. The golden cross rule is when the 50 moving average cross over the 200 moving average from below this a bullish sign that the trend might be changing from bearish to bullish. 
profitable moving average forex strategies
An important note here is you will probably not be profitable trading this strategy just as a buy signal when the 50 moving average crossover the 200 moving average because you will probably be in too late. So what I recommend is when you get the crossover wait for a retrace to support level and take entry on that support level.

Following this simple rule will make this one of the best moving average crossover for swing trading and intraday trading.

Same is true for the bearish golden cross, so when the 50 moving average cross over the 200 average from above you get a bearish golden cross and you do not want to take entry when you have the cross, you want to wait for a retrace. 
best moving average for forex trading
Then you want to trade bearish signals as long as you have the bearish trend in check, you have the 50 moving average below the 200 moving average. You can continue to trade resistance levels and go short at them. 

So when do you take profit? You can read candlestick chart patterns to find possible bottoms when you go short and find tops when you go long to take your profits.

50 And 200 Day Moving Average Rules

Uptrend - Buy at support as long as MA 50 is above MA 200.

Downtrend - Sell at resistance as long as MA 50 is below MA 200.

Trend Reversal (Downtrend to Uptrend) - MA 50 crossover MA 200 from below.

Trend Reversal (Uptrend to Downtrend) - MA 50 crossover MA 200 from above.
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Johan Nordstrom Professional Trader Risk Management
I'm a family guy in my late 20's who learned how to trade the markets in a simple yet effective way. During university I studied investing and graduated with a master's degree in risk management. Quickly, I realized that I was onto something. I started helping friends and taking students. My students started getting results, spent less time in front of their screens, and their accounts grew consistently. Learn more about me here.
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