Triple Moving Average Crossover (2024)

FAQs

Is a triple moving average crossover good? ›

The triple moving average crossover combination is great at easily seeing how the market is currently trending. When the short-term EMA is over the medium-term one it is usually a uptrend, when the long-term EMA is above the medium-term one, then the market is in a downtrend.

The combination of 9, 21, and 55 EMAs is a popular choice for a triple-moving average crossover strategy. It provides a balance between short-term and long-term trend identification.

The triple moving average crossover system generates a signal to sell when the slow moving average is above the medium moving average and the medium moving average is above the fast moving average. When the fast moving average goes above the medium moving average, the system exits its position.

Among short- and long-term EMAs, they discovered that trading the crossovers of the 13-day and 48.5-day averages produced the largest returns. Buying the average 13/48.5-day “golden cross” produced an average 94-day 4.90 percent gain, better returns than any other combination.

20 / 21 period: The 21 moving average is my preferred choice when it comes to short-term swing trading. During trends, price respects it so well and it also signals trend shifts. 50 period: The 50 moving average is the standard swing-trading moving average and is very popular.

The Best Forex Crossover Moving Average Strategies

Using the best forex moving average strategies in your trading can help you make consistent profits. This is because they make you work easier when analyzing the market. Below are moving average strategies you can apply to boost your trading results.

The EMA gives more weight to the most recent prices, thereby aligning the average closer to current prices. Short-term traders typically rely on the 12- or 26-day EMA, while the ever-popular 50-day and 200-day EMA is used by long-term investors.

Therefore, the exponential moving average may be considered the best moving average for a 5 min chart. A 20 period moving average will suit best. The MACD indicator is based on the exponential moving averages. Usually, it consists of two lines and a histogram.

When the 5 EMA crosses above the 8 EMA, and both are above the 13 EMA, you can take this as a potential bullish signal. Consider the 5 EMA as the trigger, the 8 EMA as the intermediate measure, and the 13 EMA as the baseline. The crossover suggests the momentum is in favor of buyers.

Essentially, if you have a $5,000 account, you can only make three-day trades in any rolling five-day period. Once your account value is above $25,000, the restriction no longer applies to you. You usually don't have to worry about violating this rule by mistake because your broker will notify you.

What is trading the rule of 3? ›

The Rule of Three allows us to view the market with a new set of eyes. Spotting pull backs, trend reversals, invalid vs valid price break outs. As we won't receive privileged information, we can at least have a greater percentage to align our positions with larger institutions and trading firms.

To increase your chances of profitability, you want to trade when you have the potential to make 3 times more than you are risking. If you give yourself a 3:1 reward-to-risk ratio, you have a significantly greater chance of ending up profitable in the long run.

In the triple crossover method, a bullish signal is generated when a faster-moving average crosses above an intermediate moving average which in turn crosses above a slower moving average. In this state, the price is likely in an established uptrend.

The dual moving average crossover strategy can provide steady profits when no slippage is assumed. Furthermore, one does not need to be discerning or selective in the determining the parameters for the short and long term moving averages to be successful.

In scalping, traders typically use shorter-term moving averages, such as a 10- or 20-period moving average, to identify short-term trends and generate quick profits.

What is a Golden Cross? A Golden Cross is a basic technical indicator that occurs in the market when a short-term moving average (50-day) of an asset rises above a long-term moving average (200-day). When traders see a Golden Cross occur, they view this chart pattern as indicative of a strong bull market.

So after testing the Simple moving average crossover strategy 100 times, I found that the win rate of the strategy is approximately 48 percent. What this means is, the SMA crossover strategy, and the Exponential moving average crossover strategy, have a very similar win rate.