SMA 50/200 Daily Crossover

How the rule works

The 50-day average reacts faster than the 200-day average. Their crossover identifies a change in the ordering of two smoothed price histories, not a leading forecast. A long sideways interval can generate repeated losses, and a sudden price turn can be well advanced before the cross appears. Requiring a fresh event prevents repeated entries on the same old signal.

Setup

• At each completed D1 close, calculate both averages from closes through that bar. A valid crossover needs yesterday’s fast average on or below the slow average and today’s fast average above it, or the exact inverse.
• Require 300 completed daily observations before the first decision. After a stop or time exit, wait for a new crossover; never treat the continued above/below state as a fresh cross.

Indicators

• SMA(50)
• SMA(200)
• ATR(20)

Long entry

• Buy at the next D1 open after the bullish crossover. Do not buy merely because SMA(50) is above SMA(200); the event occurs once.

Short entry

• Sell at the next D1 open after the bearish crossover. Do not open both sides or reverse until the next-bar execution has closed the prior position.

Stop loss

• Initial stop is 2.5×ATR(20) beyond entry. This rule uses the close-confirmed cross; it does not assume an intraday intersection was tradeable.

Exit

• Exit on the opposite completed crossover, or on the protective stop. If no opposite cross occurs, close at 180 D1 bars and await a fresh crossover.

Risk and position size

• Risk 0.50% equity based on stop distance. Combined exposure in pairs sharing the same base or quote currency may not exceed 1% planned risk.

Costs and execution

• Backtests must use a next-bar executable price after the cross is known. Daily close definitions differ by broker; keep one New York-close feed and record spreads and overnight financing.

When the method can fail

• Avoid compressed, criss-crossing averages and the first hours around major rate decisions. Slow averages react late and are prone to whipsaw in broad ranges.

Worked example

• Hypothetical event: yesterday SMA50 1.0890 and SMA200 1.0900; today 1.0910 and 1.0902. That is a bullish cross. A next ask of 1.0950 with ATR20 0.0040 gives SL 1.0850. If both averages were already in that order yesterday, today does not produce a new trade.

Historical test results

No tested pair meets the complete research-screen criterion. Positive cells alone do not qualify the strategy.

24 mechanical runs across 4 pairs on D1. Decisions use completed strategy bars; fills use native ICMarketsEU-Demo M15 Bid candles with explicitly modelled costs. Full window: 1 January 2025–18 September 2026. Each row starts with an independent USD10,000 account.

Interpretation: these are mechanical bar-model tests, not verified real-tick or live performance. Price rules were held fixed; subjective market-quality exclusions remain outside the mechanical model. Strategy adaptation requires a new test.

Download all test metrics and assumptions (JSON) · Download simulated trade logs and reproducible research code · Broker commission and swap documentation

Execution conventions

• Bar [0] is forming; [1] is the most recently completed bar. Unless explicitly stated otherwise, indicators use Close with zero plot shift and signals use completed bars. EMA is exponential, SMA is arithmetic and MT5 ATR is its native true-range average. Use at least 300 completed warm-up bars; a longer rule-specific requirement takes priority.
• A close-based signal is executed at the first available quote after the close, never retrospectively at the signal close. Buy at ask, sell at bid; close longs at bid and shorts at ask. A standing stop or target can fill within a bar. A gap through a stop fills at the first executable price, which can be worse than the stop.
• R means the initial entry-to-protective-stop distance, fixed at entry. Convert that distance into account-currency loss using the symbol tick size and loss-side tick value. Lots = cash risk / loss per lot, rounded down to the broker volume step. Round prices to the trade tick and recheck risk plus minimum stop/freeze distances before submitting. Budget commission and slippage separately; skip if minimum size exceeds the risk limit.
• Use one position per symbol and no averaging down. A trailing stop only tightens after a completed bar and becomes active on the next quote. The entry bar is holding bar one; a time exit executes on the quote after the specified holding bar closes. When a hard stop and a close-based exit compete, the stop already active takes precedence. With OHLC-only data, assume stop before target if both can occur in one bar; tick data is needed to resolve the order.
• The article defines the price rule. Any discretionary news exclusion changes the tested variant and must be recorded in advance. Map broker timestamps to the named London/New York time zone using historical daylight-saving offsets; do not assume a fixed UTC offset. Include spread, commission, slippage, overnight financing and triple-swap days in a profitability test.

Adapt and test your version

• Treat these inputs as a reproducible starting specification. Choose a currency pair, session and holding period that match the time you can monitor the market, then record any changes to indicator periods, thresholds, stop distance or exits as a new version.
• Change one hypothesis at a time. Reserve a later period and additional pairs for evaluation before looking at their results. Include your account’s actual trading and financing costs, compare small parameter changes, and forward-test on demo. A selected profitable window does not validate the strategy or its modified version.

Reproduce the chart in MT5

• Open EURUSD on D1. Add the indicators listed above through Insert → Indicators; use Close and zero shift unless a different setting is specified. The Data Window displays exact values for the selected completed candle.
• Compare the signal candle with the required earlier bars before moving forward. Use the crosshair to read prices and times. For custom channels, session levels or Supertrend, reproduce the formula in this guide and check the calculation before relying on an external indicator.
• Draw entry, initial SL and target only after a candle has satisfied every condition. Label planned levels as plans; they do not demonstrate a historical fill. The featured chart is genuine historical MT5 context and is not a trade-performance report.

Sources

• MT5 Help: Moving Average — Indicator/platform definition; not strategy performance.

Multi-year EURUSD benchmark — EA 03 v1.01

SMA 50/200 Daily Crossover · D1. All 20 planned base/stress cases completed and reconciled. The research binary uses the version 1.01 strategy with the documented tester cost overlay.

EURUSD only, using genuine historical bid/ask ticks in MT5’s real-tick mode. Ten independently started segments span selected dates from 2 July 2018 to 18 September 2026 (end exclusive). Excluded broker-calendar dates and short residual windows are listed in the downloadable benchmark data. Broker time is UTC+2 in US winter and UTC+3 in US summer; source ticks are UTC. Earlier history supplies warmup only, with at least 400 observed completed bars required at the first decision; warmup gaps remain a limitation. The full ten-year data archive is not a ten-year continuous performance test.

Each segment starts flat at USD 10,000. Base uses USD 3.50 per lot per side and no added execution delay. Stress uses USD 7.00 per lot per side plus a 200 ms delay. Observed spread is included in price P/L. Stress changes both commission and delay, so its difference from base does not isolate either effect. Remaining positions are closed and charged at each segment end.

Results below sum independent segment cash outcomes; they are not a compounded account return. Drawdown is the worst observed individual segment, not a continuous full-period or intratick worst-case drawdown. It uses observed native equity after modeled fees and native booked swap. Profit factor groups complete positions, including partial exits; n/a means the loss denominator is unavailable. Native booked swap is shown separately and has not been checked against historical financing rates. Native equity can affect subsequent sizing, so subtracting swap does not recreate a separate no-financing simulation.

The rules were fixed before this campaign, but parts of the historical period had already been inspected during development. This is not an untouched out-of-sample test, and no automatic profitability badge is awarded. Ledger reconciliation is not a complete independent replay of every indicator and decision. These figures describe this exact implementation and sample; they do not establish why an apparent edge would persist. Account-level and portfolio controls described elsewhere on this page still apply.

Base: Summed price P/L was non-positive; modeled commission reduced the result further. The sample lost money before financing.

Stress: Summed price P/L was non-positive; modeled commission reduced the result further. The sample lost money before financing.

Download the benchmark figures, exact segment dates and evidence hashes.