SMA Crossover:
The Institutional Compass
Master the 50 and 200-day Simple Moving Averages—the "lines in the sand" that determine the long-term trend of the global markets.
What are the 50 and 200 SMAs?
A Simple Moving Average (SMA) smooths out price data to create a single flowing line, making it easier to identify the overall trend without the daily noise.
Reflects medium-term sentiment. Quick to react to recent momentum shifts.
The "Ultimate Filter." If price is above this line, the market is in a structural Bull phase.
The Golden Cross
Occurs when the 50 SMA (Tactical) crosses ABOVE the 200 SMA (Strategic). Historically signals the birth of a new Bull Market.
The Death Cross
Occurs when the 50 SMA dives BELOW the 200 SMA. A stern warning that short-term sellers have overpowered long-term holders.
Why This Strategy Works (and Fails)
Understand the limitations of lagging indicators.
The Good
- • Filters the "Noise": You won't get distracted by one bad news cycle.
- • Institutional Respect: Everyone watches it, making it a self-fulfilling prophecy.
The Bad
- • Lagging Indicator: By the time they cross, the move has already started.
- • The "Whipsaw": In sideways markets, lines can cross back and forth repeatedly.
Don't Trade the Cross Alone
Is the Golden Cross happening at a historical floor? (High Probability).
If the cross happens while RSI is "Overbought," wait for a pullback.
Wait for the 200 SMA to flatten or curve upward before trusting a Golden Cross.
Daily vs. Everything Else
The 50/200 Crossover is built for the Daily (1D) Chart. On short timeframes (1H, 15M), it produces too many "fakeouts."