Profitability of exponential and simple moving average crossover strategy and the profitability of trend trading

Abstract

The study focused on trading based on the signals of indicators, specifically examining a strategy using moving average crossovers. One of the main purposes of the paper was to analyse the efficiency differences between the simple and exponential moving average crossover strategies. Additionally, the study explored the impact of trend-following trading on the performance of indicators. The research tested the performance of indicators using the example of companies with the highest market capitalization. The main conclusion of the article is that there was no superior indicator in cases of the examined stocks. Furthermore, during periods of predominantly rising trends, the buy-and-hold strategy outperformed the active trading strategy based on indicators.