Double Moving Average

What it is

The double moving average overlays a fast and a slow moving average on the price chart and flags the moments they cross. It packages the classic two-line crossover system — such as the 50/200 golden cross — into a single indicator.

How it is calculated

Two moving averages of the same price source are computed with independent lengths and methods: a fast one over fastPeriod bars and a slow one over slowPeriod bars. Each can use the simple, exponential, weighted or linear (regression-endpoint) method. When the fast average moves from one side of the slow average to the other, the indicator prints a crossover marker on that bar.

How to read it

Three plots appear on the price chart: fast_ma, slow_ma, and crossover_signal markers at each cross. When fast_ma runs above slow_ma the shorter-term trend is up; when it runs below, the shorter-term trend is down. The wider the gap between the two lines, the stronger the trend; converging lines warn that momentum is fading. Frequent alternating markers in a tight cluster indicate a range where the system is being whipsawed.

What to look for

• Signal-line crossUpside

  fast_ma crosses above slow_ma (a golden cross on longer settings) — traders often read this as the start of an uptrend.

• Signal-line crossDownside

  fast_ma crosses below slow_ma (a death cross on longer settings) — commonly read as the start of a downtrend.

• Trend filterContext

  The ordering of the lines is a simple regime filter: long bias while fast_ma is above slow_ma, short bias while it is below.

• ConfirmationContext

  A widening gap after a cross confirms the new trend; a cross that immediately reverses suggests a false signal.

When to use it

Crossover systems are popular on daily and weekly stock and index charts (the 50/200 pair is the best-known example) and on trending forex and crypto pairs at any timeframe. They perform poorly in sideways markets, where the two lines braid around each other and produce a string of losing signals.

Works well with

Settings explained

fastPeriod

Default 10. Lowering it makes crosses fire earlier but more often; raising it delays signals and filters noise.

slowPeriod

Default 20. Raising it anchors the system to a longer trend and reduces trade frequency; lowering it makes the pair behave like two fast averages and increases whipsaws. Keep it comfortably above fastPeriod.

fastMethod

Default simple. Switching the fast line to exponential or weighted makes it react sooner to fresh price action, moving crosses earlier.

slowMethod

Default simple. A faster method on the slow line narrows the lag between the two averages; most traders leave the slow line simple for stability.

source

Default close. Both averages are computed from this price field; close is standard, while hl2 or similar blends smooth out erratic closes.

Limitations and common mistakes

• Crossovers lag: entries arrive after the turn and exits give back part of the profit.
• Range-bound markets generate repeated false crosses that can erode an account faster than one good trend repays.
• The marker only reports the fast/slow relationship — it says nothing about volume, volatility, or how far the move may travel.

References

• Origin: Classical construct—no single originator.
• Moving average crossover — Wikipedia (opens in a new tab)

This page explains how an indicator is calculated and read. It describes past data, not what price will do next, and it is not a recommendation to trade. Read the disclaimers.

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