![]() Ultimately the price did fall from Rs 2040 to Rs 1880 levels. Swing traders could enter at such crossover by selling shares with the expectation that the short-term trend has turned bearish and prices will fall. Similarly, at dead crossover, the 20-day SMA falls below the 50-day SMA and we see that prices start falling. Their view is further strengthened by the fact that the crossover is accompanied by heavy volumes suggesting that there is wider market participation in the trend. Traders on Golden crossover can enter with a view to make profits as the price trend is bullish. ![]() This happens again in June when the 20-day SMA crosses 50-day SMA and price rises from ₹1,980 levels to ₹2,300. It will be seen that as 20-day SMA crosses over 50-day SMA there is a spike from ₹1,960 levels to ₹2,225. In the above price chart, we see two golden crossovers and one dead crossover. Thus, swing traders can buy shares with a view to take profit as price rises. Whenever a short-term moving average crosses under (cuts from above) a long-term moving average, we call it a death cross and take it as a bearish sign to enter the market on the sell side.įor Example, if the 20-day SMA cuts the 50-day SMA from below we read it as a sign that the near term trend is turning bullish and prices will rise. Whenever a short-term moving average crosses over (cuts from below) a long-term moving average, we call it a golden crossover and take it as a bullish sign to enter the market on the buy side. Generally, traders use 20-day SMA, 50-day SMA and 200-day SMA to determine trades. These are known as simple moving averages (SMA) and are represented as a line of the chart. They can calculate the average closing price of a share over 20 days, 50 days, 200 days etc. Swing traders can use moving average crossovers as strategies to enter trades. As we all know by now, moving average is a technical indicator that can be extremely helpful in performing swing trades. Firstly, let us start with the moving average strategy.
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