Crossover

Crossover is a term used by technical analysts when referring to a point on a stock chart when an indicator and a security (or another indicator) intersect. The intersection signals a change in direction, or confirms direction of the stock price.

Crossover

Crossover is a term used by technical analysts when referring to a point on a stock chart when an indicator and a security (or another indicator) intersect. The intersection results in a crossover and either signals a change in direction, or confirms an existing belief as to the future direction of the stock price.

Crossover Interpretation

A prime example of crossover using two indicators would be the Stochastic Crossover trading strategy.  Stochastics crossover occurs when the %k rises above the %d, resulting in a Buy signal;  or when the %k falls below the %d, resulting in a Sell signal.

Price chart with an example of Stochastics %K %D crossover

Note that this type of system should be used in conjunction with at least one trend indicator.  Otherwise whipsawing will likely occur.

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