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Moving Average Crossover indicator (MA)
The Moving Average (MA) is a technical indicator designed to measure a financial asset's price movement and trend. It is a handy indicator, and we have created three filters based on it to help you increase your edge in trading:
- Distance - The distance of the price from its average. (KB)
- Crossover - Built from two moving average and the relationship between them.
- Rank - The Percentile of the distance between the asset price and its average.
This article will describe the Crossover filter. For the other two filters, please refer to the right article from the links above or below.
Why use it?
You can use the MA indicator to measure the trend of the financial asset. It is essential to trade with the trend, so filtering out trades that don't fit your desired direction will increase your probability of profit and save you time.
How to use the MA Crossover indicator in SamurAI
Since financial assets can be 'choppy,' you can get false signals in your system, especially around the cross. To solve it, it is custom to use 2 MAs, one short term and one long-term to 'smooth' the asset's movement. You can use the SMA indicator to:
- Find stocks in Bullish/Bearish trend - When the short term MA is above the long-term MA, the asset is bullish, and when the short-term MA is below - the asset is bearish.
- Cross - You can set the filter to find stocks that the MAs crossed to indicate a changing trend.
Settings
- Length: in days. During the market hours, we will simulate the last price as the closing price for that day to show you how the MA changes during market hours.
- MA #1 is usually the short-term MA
- MA #2 is usually the long-term MA
- Drop-Down menu:Pick The right option:
- MA1 is either below or above MA2 - It is used as 'Any,' and you can see the value in the column.
- MA 1 is above MA 2 - Find stocks in a bullish trend.
- MA 1 is below MA 2 - Find stocks in a bearish trend.
- Min Periods outside range: This option allows you to use cross and breadth. It controls what the behavior was before today.
- The number is in days - how many days the stock was outside the range.
This is useful for:- Cross: Set it as min periods outside to 1.
- Breadth: Set it as min period inside for 20, for example (About one month).
- See more common use cases below.
- The number is in days - how many days the stock was outside the range.
Common use cases
- Stock is in a bullish trend - (1) MA#1 is 5 (2) MA#2 is 200 (default), (3) MA 1 is above MA 2 (4) Min. periods MA1 below MA2: 0 (default)
- Stock is in a bearish trend - (1) MA#1 is 5 (2) MA#2 is 200 (default), (3) MA 1 is below MA 2 (4) Min. periods MA1 above MA2: 0 (default)
- Golden Cross - (1) MA#1 is 50 (default) (2) MA#2 is 200 (default), (3) MA 1 is above MA 2 (4) Min. periods MA1 above MA2: 1
Switching between Simple and Exponential Moving Average
There are many ways to calculate the moving average formula. We support the two most popular calculation methods:
- Simple - This gives the same weight to each value in the time range.
- Exponential - This calculation gives higher weight to the most recent values, making the indicator moves faster.
To switch between the calculations, change the drop-down menu at the top of the filter.
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