Best Moving Average crossover for Intraday-Swing Trading
Hello friends, Welcome to StocksVibe.com. As you had landed on this page, It means you are searching for best moving average crossover to refine your trading Style. I don’t know what type of trading do you do whether it is Intraday trading or Swing Trading; But moving average Crossover are indicators widely used by the top market traders to confirm the trend of the markets. If you are trading through a web platform, you can check trend of movement by using MACD Indicator. We are here to explain you which moving average crossover are to be used for your Intraday/Swing trading.
Before moving forward, Let me introduce you with type of moving averages. Basically, there are two kind of Moving Averages;
Simple Moving Averages & Exponential Moving Averages.
As its name suggest, Simple Moving Average is the Simple Average of movement of prices over time while Exponential moving average is the moving average of movement of exponential prices. If you are a Intraday trader, Exponential Moving average is more useful to you as compared to Simple Moving Average. Every trader has its own particular strategy to trade. So, it is up to them which moving average to use and when.
Simple Moving Average or Exponential Moving Average…Big Question ?
If you are a new trader and you had found out a strategy to trade and you don’t know which moving averages to use, you can do this task;
- Plot Simple Moving Average on the chart of selected stock.
- Similarly, Plot Exponential Moving Average on the chart of same stock.
- Compare your trading decisions on the basis of both chart and select at your own which moving average is working for you and helping in taking better decision.
How to select best Moving Average Crossover for Intraday/Swing Trading
There are numerous strategies related to moving average crossover, We are going to explain two of the famous strategies which are Price CrossOver and Moving Average Crossover.
- Price Crossover Strategy for Intraday/Swing Trading:
In this strategy, Signal is generated on the basis of movement of Moving Average. It is your wish if you want to use Simple or Exponential Moving Average. Let me explain you with an example. If Price is going above moving average, Buy Signal has been Generated while if Price is going below moving average, Sell SIgnal has been generated. It is up to you of how much period you want to take moving average. Generally, Traders consider moving average of 10,20,50,100 or 200 days. Let me explain you with example.
Above chart is of Nifty 50 stocks for the moving average of 20 days. If Candle is approaching for 20 day MA from below side, buy signal has been generated. Similarly, If Candle is approaching for 20 day MA from upper side, sell signal has been Generated.
2) Moving Average Crossover Strategy for Intraday/Swing Trading:
This Strategy is little bit different as compared to previous one. In this, Sell/Buy call has no relation with the price. You just have to set moving averages for 2 different periods, Diff. Periods could be 20 days/50 days, 50 days/100 days and 20 days/100 days. Strategy is simple if Short Period Moving average is crossing below the long period Moving average; You have to sell while if Short period Moving average is crossing above the long period Moving average; You have to buy.
Let me explain you this strategy for the Intraday trading through chart.
As you can see, Above chart is of the Reliance Industries & I am showing moving average of 20 and 50 days. At 11:30, 20 day MA tried to cross 50 day MA when its price was Rs. 1225. Once, 20 day MA cross 50 day MA; there was 10 points of movement.
I hope, this article will help you to gain profit from market. Comment below for any kind of feedback or question. We will get back to you.