Moving Average Crossover Systems
Fast MA over slow MA — the simplest fully mechanical trend system, and a masterclass in tradeoffs.
Trend StrategiesAdvanced 7 min read· Lesson 3 of 9 in Trading Strategies
Overview
Two MAs define regime: fast above slow = long. Everything else is parameter choice: short pairs (10/20) trade often and bleed in chop; long pairs (50/200) trade rarely and give back big chunks at turns. There is no magic pair — only the tradeoff.
Market conditions
Same as all trend systems: needs trends. The system IS the discipline — its value is removing your opinions, which only works if you actually follow it.
Entry rules
Fast MA closes above slow (long). EMA20 cross_above EMA50 as a formula, or the Golden Cross preset for 50/200.
Exit rules
Reverse cross. Yes, it exits late — that lag is the price of never missing a big trend.
Stop loss
The reverse cross IS the stop; an added catastrophe stop (e.g. 3×ATR) guards gap risk between signals.
Position sizing
Fixed-fractional off the distance to the crossover exit; wide exit → small size.
Risk management
The killer is abandoning the system after five whipsaws right before the trend that pays for them. Backtest first so the loss streaks are expected, not shocking.
Evidence & backtesting
Crossover systems capture most major trends late-in/late-out; they lag buy-and-hold in secular bulls and shine in prolonged bears — run the preset on different symbols and see both outcomes. Every strategy here maps to this platform's Backtest panel — the matching Strategy Preset fills entry/exit/stops in one click, and every result is benchmarked against buy-and-hold, which most simple strategies LOSE to on strong trenders. Seeing that honestly is the lesson.