A Technical Approach To Trend Analysis: Practical Trade Timing for Enhanced Profits
by Michael C. Thomsett
Price Crossover
The value of MA is that it establishes a recognizable trading range over time. This range—the current trend—is not only easily identified, but once price evolves above or below, it creates a specific signal moving away from the established trend.
A bullish signal results from current price crossing above both MA lines, and a bearish signal is found when price crosses below both MA lines. The rationale makes sense for secondary and swing trades, but primary trends (price crossover) may make the beginning and end of a secondary trend as well. Thus, MA tracked over a long period is useful for determining the longevity of the trend, whereas short-term crossover can be used to spot and time shorter-term trends, notably swing trends. ...
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