If a fast line, such as the SMA 50, rises above a slow one like the SMA 200, it is called a ; if it falls below, a death cross. Both sound like a signal but are lagging: the crossover only comes once the price has already moved a lot. In the lines often cross back and forth without a trend following.
Why the crossover comes so late
The SMA 200 contains the closes of the last 200 days; each new day counts only one two-hundredth. By the time the SMA 50 catches up with it after a low, the price has usually already risen a good deal. In the model, the golden cross came 65 candles after the lowest close.
False signals in sideways phases
If the price swings within a range, the fast line swings with it and cuts the slow one again and again. Each crossover looks like a change of trend, but none follows. A rule that trades every crossover pays fees, and small losses there every time.
Other lengths, same pattern
Shorter pairs such as 20/50 cross earlier, but are wrong even more often. Longer pairs cross less often and even later. There is no best pair for all symbols – every pair trades speed for false signals. Whether a crossover rule is worth anything after costs, only an honest shows.