Moving averages are simple but powerful tools. They help traders see the market trend and decide when to buy or sell. Swing trading is all about catching price moves over a few days or weeks. Moving averages can show you the way.
This guide will explain the best moving averages for swing trading. You’ll learn how to use them and combine them with other tools. By the end, you’ll know how to make smarter trades with moving averages.
What Are Moving Averages?
A moving average (MA) is a line on your chart. It shows the average price over a set number of days. This smooths out small price changes, so you see the bigger picture.
There are two main types of moving averages:
- Simple Moving Average (SMA): This is the basic average of prices over a set time, like 50 or 200 days.
- Exponential Moving Average (EMA): This gives more weight to recent prices. It reacts faster to market changes.
Why Use Moving Averages for Swing Trading?
Swing trading looks at short- to medium-term price moves. Moving averages are perfect for this because they:
- Show the trend direction.
- Act as support or resistance levels.
- Give buy and sell signals.
For example, if the price stays above a moving average, it’s likely an uptrend. If it’s below, the trend is probably down.

The Best Moving Averages for Swing Trading
50-Day Simple Moving Average (SMA)
The 50-day SMA is a popular choice. It helps traders see the overall trend.
How to Use It
- When the price is above the 50-day SMA, the market is in an uptrend. Look for buying chances.
- When the price is below, it’s a downtrend. Focus on selling.
Example: EUR/USD is trading above its 50-day SMA. The price dips and touches the SMA but bounces back up. This could be a good time to buy.
20-Day Exponential Moving Average (EMA)
The 20-day EMA is faster than the SMA. It helps spot short-term moves and trend reversals.
How to Use It
- Use it with a longer moving average, like the 50-day SMA, to confirm trends.
- Look for crossovers. When the 20-day EMA crosses above the 50-day SMA, it’s a buy signal.
Example: USD/JPY crosses above the 20-day EMA, signaling a possible uptrend. If the 50-day SMA agrees, it’s even stronger.
200-Day Simple Moving Average (SMA)
The 200-day SMA shows the long-term trend. It’s often used to decide if the market is bullish or bearish.
How to Use It
- When the price is above the 200-day SMA, it’s a bullish market. Look for buys.
- When it’s below, it’s bearish. Look for sells.
Example: GBP/USD breaks above the 200-day SMA after months below it. This could mean the trend is changing, so traders might look for buying chances.

Moving Average Crossovers for Swing Trading
A moving average crossover is one of the most popular strategies for swing traders. This method uses two moving averages of different lengths—one short-term and one long-term—to identify changes in trend direction.
How to Use Moving Average Crossovers?
- Golden Cross: When a short-term moving average (like the 20-day EMA) crosses above a long-term moving average (like the 50-day SMA), it signals a bullish trend. This is a great time to consider buying.
- Death Cross: When the short-term moving average crosses below the long-term moving average, it signals a bearish trend. This is a sign to look for selling opportunities.
Example: EUR/USD is trading in a tight range. Suddenly, the 20-day EMA crosses above the 50-day SMA, creating a golden cross. This indicates a new uptrend, prompting traders to enter a long position.
Pro Tip: Use moving average crossovers with confirmation from another indicator, like RSI or MACD, to avoid false signals.
Customizing Moving Averages for Your Strategy
Moving averages aren’t one-size-fits-all. Different trading styles and market conditions may require adjustments to the moving average settings. Swing traders often customize the time frames to match their strategy.
How to Customize Moving Averages?
- Shorter Timeframes for Fast Moves: If you trade short-term swings, use shorter moving averages like the 10-day or 20-day EMA.
- Longer Timeframes for Bigger Trends: For larger price moves, stick with the 50-day or 200-day SMA to identify the broader trend.
- Adjust Periods Based on Market Volatility: In a volatile market, shorter moving averages can react faster, while longer ones help filter out noise.
Example: USD/JPY is in a choppy market, so you switch to a 10-day EMA to capture smaller price moves. In a steady uptrend, you might switch back to the 50-day SMA to avoid over-trading.
Pro Tip: Backtest your moving average settings on historical data to find what works best for your trading style.
Using Moving Averages for Breakout Trades
Breakouts happen when the price moves above resistance or below support levels. Moving averages can help you spot and trade these opportunities effectively.
How to Use Moving Averages for Breakouts?
- Look for the price to break above a moving average in an uptrend. This confirms the breakout.
- Combine moving averages with Bollinger Bands or volume indicators to confirm the strength of the breakout.
Example: AUD/USD is trading below its 50-day SMA for weeks, stuck in a range. Suddenly, the price breaks above the SMA with high volume. This signals a breakout, and you enter a long trade, riding the momentum.
Pro Tip: Use the moving average as a trailing stop to lock in profits as the breakout continues.

Combining Moving Averages with Other Tools
Moving Averages + RSI
The Relative Strength Index (RSI) measures if the market is overbought or oversold. Combine RSI with moving averages to confirm trades.
How to Use It
- Look for oversold RSI (below 30) when the price touches a moving average in an uptrend.
- Look for overbought RSI (above 70) when the price hits a moving average in a downtrend.
Example: EUR/USD dips to its 50-day SMA, and RSI shows oversold. This could signal a good time to buy.
Moving Averages + MACD
The Moving Average Convergence Divergence (MACD) shows momentum. It works well with moving averages to confirm trends.
How to Use It
- Look for a MACD bullish crossover when the price is above the 50-day SMA.
- Look for a MACD bearish crossover when the price is below the 50-day SMA.
Example: USD/CHF drops below its 50-day SMA, and MACD shows a bearish signal. This could confirm a selling opportunity.
Moving Averages + Bollinger Bands
Bollinger Bands measure market volatility. Combine them with moving averages to find potential reversals.
How to Use It
- Look for the price to touch the lower Bollinger Band near a moving average in an uptrend.
- Look for the price to hit the upper Bollinger Band near a moving average in a downtrend.
Example: AUD/USD dips to the 20-day EMA and the lower Bollinger Band. This could be a strong buy signal.
Managing Risk with Moving Averages
Risk management is key to successful trading. Here’s how moving averages can help:
- Set Stop-Loss Orders: Place stops just beyond the moving average. This protects you if the market reverses.
- Avoid Flat Markets: If the price keeps crossing the moving average, it’s a choppy market. Wait for a clear trend.
- Use Smaller Trade Sizes: When the price is far from the moving average, trade smaller to manage risk.
Identifying Pullbacks with Moving Averages
Pullbacks are temporary reversals within a larger trend. Swing traders love trading pullbacks because they offer great opportunities to enter the market at a better price. Moving averages can help you spot these pullbacks and time your entries.
How to Use Moving Averages for Pullbacks?
- In an uptrend, watch for the price to dip and touch or come close to a moving average, such as the 20-day EMA or 50-day SMA.
- In a downtrend, look for the price to rise and meet a moving average before continuing downward.
Example: GBP/USD is trending up and trading above the 20-day EMA. The price dips slightly, touching the EMA, before bouncing back. This is a classic pullback, signaling a good entry point to buy.
Pro Tip: Combine moving averages with oscillators like RSI or the Stochastic Oscillator to confirm that the pullback is about to end and the trend will resume.

Moving Averages for Trend Reversals
Trend reversals are critical moments when the market changes direction. Moving averages can help you identify these reversals early, giving you a chance to capitalize on new trends.
How to Spot Reversals with Moving Averages?
- Crossovers: When a shorter moving average crosses below a longer moving average (death cross), it signals a bearish reversal. When it crosses above (golden cross), it signals a bullish reversal.
- Price and Moving Average Interaction: If the price breaks and closes above a moving average that previously acted as resistance, it could signal the start of an uptrend. The opposite is true for downtrends.
- Flattening Moving Averages: A flattening moving average often signals the end of a trend and the start of a consolidation or reversal.
Example: USD/CAD has been in a strong downtrend, with the price consistently below the 50-day SMA. One day, the price breaks above the SMA, signaling a potential reversal. Swing traders might start looking for buying opportunities.
Pro Tip: Use a combination of longer moving averages (like the 200-day SMA) and shorter ones (like the 20-day EMA) to confirm the reversal. Watching for high volume during the break can also validate the move.
Conclusion
The best moving averages for swing trading can help you trade smarter and more confidently. The 50-day SMA, 20-day EMA, and 200-day SMA are all excellent choices for spotting trends, finding trade setups, and managing risk. Combining moving averages with tools like RSI or MACD makes your strategy even stronger.
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FAQs
What are the best moving averages for swing trading?
The 50-day SMA, 20-day EMA, and 200-day SMA are great for swing trading. They help you spot trends and find trading opportunities.
What is the best EMA to swing trade?
The 20-day EMA is one of the best EMAs for swing trading. It reacts quickly to price changes and helps you catch short-term moves.
Can I use moving averages with other indicators?
Yes, moving averages work well with RSI, MACD, and Bollinger Bands to confirm trades and improve accuracy.
How do I set stop-loss orders with moving averages?
Place your stop-loss just below the moving average in an uptrend or just above it in a downtrend. This protects your trades from sudden reversals.
Why is Defcofx a good platform for swing trading?
Defcofx offers high leverage, low fees, and fast withdrawals. They also provide a 40% welcome bonus, making it a great choice for traders looking to grow their accounts.
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