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Study Determines The Best Moving Average Crossover Trading Strategy

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The Dow Jones Industrial Average got a lot of press this week after it succumbed to its first traditional “death cross” since 2011 when the index’s 50-day simple moving average (SMA) crossed below its 200-day SMA. Technical traders often view this crossover as a bearish long-term technical signal, but traders that sold the index and its components at the time of the cross sold the Dow following a drop of about 3.5 percent in less than a month.

The Concept Of Crossovers

The idea behind trading crossovers is that a short-term moving average above a...