Can the Moving Average Crossover Strategy Indicator Be Profitable?

Learn the secrets and techniques of trading Moving Average Indicator strategies with real technical analysis examples in this tutorial guide. Whether you trade in the stock market or forex market, understanding these strategies can help you make money in intraday trading and swing trades.

Can the Moving Average Crossover Strategy Make You a Profitable Trader?
How do you trade it to make more money? Which moving average strategy is the right one? How do you use this indicator properly without blowing up your accounts? Let’s find out.

The Moving Average is one of the oldest and most powerful indicators ever made. Not just because of its simplicity, but because it actually shows you the average price of a stock and even the direction of the trend. You might have seen some business news channels get excited when the price crosses the 200-period moving average because it can indicate the start of a new trend. But as I said in my Ichimoku indicator video, indicators that are easy to understand can be difficult to use for executing trades. If stock and forex trading were easy, everyone would be a millionaire.

Challenges in Using the Moving Average Crossover Strategy
The Moving Average Crossover Strategy is simple, but there are a few challenges you may encounter when executing trades with it. Let’s see what they are and how to avoid them once we understand how to use the Moving Average Crossover Strategy properly. Like always, in my next video, I will test this strategy 100 times to find its real win rate. I’ve already tested many other indicators 100 times to show their real win rates. If you haven’t watched those videos, go watch them now. And subscribe to the Trading Rush Channel to see this moving average strategy and many other strategies tested 100 times. After all, you don’t want to risk your money on something that doesn’t even work.

Setting Stop Loss and Profit Targets
There are multiple ways to set the stop loss in this strategy. Once you enter a long trade, you can set the stop loss below the swing low or just below the crossover of these moving averages. Remember to give the price enough room to wiggle around; otherwise, your stop loss can get hit. In a long setup, if you set your stop loss below the swing low, there is a low probability of the price hitting your stop loss.

Now let’s talk about the profit target, something every trader loves. But where should we set our profit target in this moving average strategy? Just like the stop loss, there are different ways to set profit targets. Some use a fixed target. For example, some will set their profit target two times more than the risk. This way, they will only take 200 percent profit—nothing more, nothing less. This is a good strategy to get consistent profit.

On the other hand, some will take profit and exit the trade when another moving average crossover is generated. This way, they have a chance to stay in a long trend for a long time. This strategy can generate a great risk-to-reward ratio, but the market doesn’t make big moves every time. Both methods have their advantages and disadvantages. It really comes down to the trader’s personality. If you can stare at the screen for a long time and keep adjusting your trade, go with the second method. If you cannot stare at the screen and see your profit/loss changing, go with the first method. That way, you don’t have to sit to adjust the trade. Just set your stop loss and profit target, and go for a walk or maybe look for another trade. Just remember to cancel your stop loss when your profit target order hits, and vice versa.

Conclusion
That’s all there is to it. In my next video, I will test this strategy 100 times to see if it is profitable or not. Subscribe to the channel if you want to see it.

Or maybe check out other videos where I tested MACD, RSI, and many other strategies 100 times to show their real win rates. After all, you don’t want to risk your money on something that doesn’t even work.

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