Trends/Moving averages

20 and 50 average crossover

The 20-bar average crossing the 50-bar average, marked on the chart where it happens.

Moving averagesBest on 6M, 1YAlso called 20/50 cross
20 and 50 average crossover diagramIllustration of the 20 and 50 average crossover shape. It is a sketch, not real price data.Cross2050
Illustration of the 20 and 50 average crossover shape. It is a sketch, not real price data.

What it shows

A short average moves faster than a long one. When the short one crosses the long one, the recent trend has changed relative to the longer one. The cross is a fact about the lines, not a prediction.

The 20 and 50 are common choices for medium-term charts.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

  1. Compute the 20-bar and 50-bar SMA.
  2. Mark a cross when the 20 moves from below the 50 to above it (or the reverse).
  3. Show the date and price of each cross.
  4. Count crosses in the period shown.

Starting values: Short 20; Long 50; Price used close. These are proposed and will be tuned on real price data before launch.

How to read it

  • The blue line is the 20 and the gold line is the 50.
  • Gold dots mark the crosses.
  • Many crosses in a short time means a choppy market.

Status labels you may see

LabelWhat it means
20 above 50The short average is above the long one.
20 below 50The short average is below the long one.
Just crossedA cross happened in the last 5 bars.

What cancels it

A cross back the other way ends the state.

What traders check next

  • How many crosses happened recently.
  • Whether price is above or below both lines.
  • The slope of both lines.

Limits

  • Crosses lag price.
  • In sideways markets crosses come often.
  • The pair 20 and 50 is a convention.

Try it in forecastviz

  • Open any ticker and choose Moving averages → 20 and 50 average crossover in the left menu.
  • Switch between 6M, 1Y to see how the picture changes.
  • Compare with Golden cross and Death cross on the same chart.

Questions

Is a cross a signal?

It is a fact about two averages. We make no claim about what follows.

Why 20 and 50?

They are common for medium-term charts.

Related trends

Further reading

  • Murphy, Technical Analysis of the Financial Markets
  • Kaufman, Trading Systems and Methods
  • Achelis, Technical Analysis from A to Z

Educational only. Not financial advice, and not a price forecast. Charts are drawn by code from past price data, which may be delayed.