I am trying to learn the reasoning behind why, when they cross, it signals a buy and sell situation? What is the theory behind that?
Here is an excerpt from Investopedia but no real reason behind it
“Crossovers are another way to utilize moving averages. By plotting a 200-day and 50-day moving average on your chart, a buy signal occurs when the 50-day crosses above the 200-day. A sell signal occurs when the 50-day drops below the 200-day. The time frames can be altered to suit your individual trading time frame.”
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