Moving Average crossovers are often viewed tools by traders. Instead of halves, buy or sell one-third of a position when the quick SMA crosses over the next quickest SMA, another third when the quick SMA crosses over the slow SMA, and the last third when the second quickest SMA crosses over the slow SMA.Ī moving average crossover technique that uses 8+ moving averages (exponential) is the moving average exponential ribbon indicator.He/she would then enter the other half when the quick SMA crosses over the slower SMA. A trader might consider a money management technique of buying a half size when the quick SMA crosses over the next quickest SMA.However, this is basically a 2 SMA crossover technique, not a 3 SMA technique. A more conservative approach might be to wait until the middle SMA (20-day) crosses over the slower SMA (50-day).

There are numerous variants and methodologies for using the 3 simple moving average crossover method.

Thereafter, the second crossover of the quickest SMA (10-day) and the slowest SMA (50-day), might trigger a trader to buy or sell.

A trader would usually not place an actual buy or sell at this time.

The first crossover of the quickest SMA (in the example above, the 10-day SMA) across the next quickest SMA (20-day SMA) acts as a warning that prices might be reversing trend.

The 3 simple moving average method could be interpreted as follows:

Please note, this is an example – not a recommendation.

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