Short-term moving averages crossing above longer-term moving averages is generally seen as an uptrend and short-term moving averages crossing below long-term moving averages is generally seen as a downtrend.

A Crosses’ study case

We examine what happens in the major FX instruments an hour after (Checkpoint: 4, meaning 4 periods of H1 each) 5-period SMA crossover above the 33-period SMA. Always be sure to check the timeframe to be sure what the period (i.e. H1 time frame) represents.

Traders set the Fast MA period (i.e. 5) and the Slow MA period (i.e. 33), then select Cross Up or Down (i.e. Up) and the Checkpoint (i.e. 4). At the Checkpoint box, traders count the bars that they want to monitor after the criteria are met, then click on the Calculate button.

The Screener for Crosses displays the following:

1. Symbols

2. Total Bars, which is the total number of bars since the beginning of the range (e.g. available data after the 01.01.2010)

3. Cross Count, which is the count of the Crosses that Investors set at in the Setup Filter.

4. First Cross

5. Last Cross

6. Last/Mean/Median display the change % for the study that traders set.

Overall, analyzing the above historical data after the default starting date 2010.01.01, we see that the 5-period SMA crossover to 33-period SMA in the M15 time frame has resulted in a positive % change in all prices’ instruments on average (Mean).

More specifically, picking up the EURUSD pair, we see that the study contains 101200 total H1 bars and 1663 crossover of 5-period SMA to 33-period SMA. According to the statistics, we see that the last crossover resulted in a 0.49% change. Additionally, looking at the mean % change and median % change, we also see that both were positive (0.07% and 0.03% respectively).

One might interpret these results as saying that while the study produces positive results for going long (bullish) probably it’s a good and profitable strategy to follow..

By clicking on the EURUSD symbol, we get the graph with the study’s results as it seems below (only available in MT5)

In the MT4 version, we have a different look and feel but the logic remains pretty much the same. In this version we also have a notification if the study is active right now. In this example we see that the GBPUSD currency pair had a cross up during the last 10 bars (checkpoint) and currently is on a -3.39% from this cross.