A downward cross is known as a Dead Cross and an upward as a Golden Cross . While that is an acceptable method of determining a long term trend in something like the Dow Jones index, for individual stock or currencies the lag involved normally means that the bulk of the move has already occurred. Profits can still be made but it is impossible to maximise the profit potential. I have found that a more immediate way of determining trend is to use the cross of the actual price of the instrument through the selected moving average to generate the sell or buy signal. First glance at the chart shown on the left shows that at first glance the crossover of the shorter mvg avg through the longer is a perfectly good trend indicator.
Closer examination reveals that by the time the crossovers occur-red the spot price had moved on.
While not without the occassional whip, better profit making opportunities are created. Most practitioners use simple averages, some use weighted . But while not criticising those types I have found that the displaced moving average is better at reducing the whipping that can happen in trendless markets. What displacement actually means is that the selected moving average is pushed forward in time by a 2nd average. This effectively filters short term noise .