Forex moving average crossover

Checked October 2026

The 5-and-20 cross buys when the short average rises through the long one and sells when it falls back through. Levich and Thomas tested rules of this family on currencies in 1993. Backtoast ran the 5-day against the 20-day. The 5/20-day version failed our test, breaking even over 338 trades.

Backtoast

You pay $99 for two full tests of your own strategy, and a pass is an offer of 30% of the profit Backtoast makes trading it with its own money.

Forex moving average crossover

Both averages are of daily closes, and the position flips at each cross, so it's always long or short. A trend that keeps going pays, and a sideways market whipsaws it from one side to the other.

The run traded the euro, sterling, yen, Swiss franc and Canadian dollar against the dollar, a fifth of the account each.

The forex filter rule came from the same 1993 study and also stays in the market, flipping on a percent move instead of a cross.

When it works

A crossover is trend following, so it pays when a currency trends for months, usually on a widening rate gap between central banks, and a fast 5/20 pair loses in range-bound markets, where it flips on every swing. Traders keep it as the simplest trend filter there is, often to pick the side for another entry. Slower averages, like the 1/200 rule in the same study, flip less often, and a draft can test that before you spend a full test.

Origins

Levich and Thomas found the 5-and-20 rule made 8.9% to 11.2% a year on the mark, pound, yen and Swiss franc from 1976 to 1990, before costs, and 2.7% on the Canadian dollar. Neely, Weller and Ulrich later found those profits gone by the early 1990s. The run is from late 2021 to October 2026.

The run is Backtoast's, from 29 October 2026, after costs.