Trend / Momentum
Trend Following: Moving Average Crossover
Two moving averages, one fast and one slow, watch the same price. When the fast one crosses above the slow one, the trend is (probably) up. When it crosses back below, that trend is (probably) over. This page runs that rule on a live, randomized price path so you can see what "probably" actually costs.
Run the crossover yourself
Drag either period slider and the chart, trade markers, and equity curve below all redraw instantly on the same price path. Generate a new price path any time to see how the same two settings hold up on a different stretch of market.
How it works
The Concept, At A Glance
- Two averages, two speeds. The fast MA reacts quickly to new price moves. The slow MA lags on purpose, smoothing out noise so it only reflects the bigger picture.
- The crossover is the signal. When the fast MA closes above the slow MA, that's read as the trend turning up, buy. When it closes back below, that's read as the trend turning down, exit (or flip short, in a two-sided version).
- It trades what already happened. A crossover only confirms after the trend has already moved. The strategy is never first in and never first out, it gives up the front and back of every move in exchange for not guessing the turn.
- Shorter periods mean more trades. A 9/30 setup will fire far more crossovers than a 20/80 setup on the same data, more trades, more whipsaws, but faster response when a real trend starts.
Where this breaks
Chop kills it
A crossover system needs a sustained directional move to pay for its own false signals. In a sideways, range-bound market, the fast and slow MA cross back and forth constantly, generating a string of small losses with no trend ever showing up to cover them. Run the simulator above with a short fast period on a choppy path and watch the trade count climb while win rate sinks. The strategy isn't broken in that stretch, the market isn't offering what it needs.