Which Moving Average Works Best for Swing Trading?

For swing trading, the exponential moving average (EMA) is generally considered the best option, with the 20-day and 21-day EMAs providing timely, actionable signals. Many successful swing traders blend short- and medium-term averages, including the 20 EMA, 50 SMA/EMA, and occasionally the 200 SMA/EMA, to capture trends, avoid lag, and confirm market bias.   

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Why Moving Averages Matter in Swing Trading   

Swing trading aims to capitalise on price movements that last from days to weeks. It's important to recognise trends and track momentum. Moving averages help to smooth out price action. They assist in identifying the current trend and in separating noise from meaningful movement. The two most popular types are: 

• Simple Moving Average (SMA): Gives the same importance to all price points during a specific period. This method helps confirm long-term trends, but it reacts slowly to price changes. 
• Exponential Moving Average (EMA): Gives more weight to recent prices and thus responds faster to new data, providing earlier signals for trade entries and exits.  

Optimal Moving Average Settings 

For most swing trading strategies, these settings are popular choices.   

20-day EMA: This is very responsive and is commonly used for short- to medium-term swing trades.   

50-day SMA/EMA: This helps confirm trend direction and filters out short-term noise.   

200-day SMA/EMA: This is a traditional measure for major market bias and longer-term positioning. 

A typical swing trading setup might use a 20 EMA for spotting early entries and exits, a 50 SMA/EMA for trend confirmation, and a 200 SMA/EMA for determining the broader bias, allowing traders to align positions with both immediate and underlying trends.  

How to Use Moving Averages for Swing Trades 

• Entry signals are often triggered when a shorter EMA crosses above a longer SMA or EMA (e.g., 20 EMA crossing 50 SMA is a bullish signal). 
• Exits can be managed by monitoring crossovers in the opposite direction or when price moves significantly away from the chosen average. 
• The 200-day average is often used to decide whether to look primarily for long or short trades; above is considered bullish, below is bearish.  

Best Practices and Tips 

• EMAs suit fast-moving markets, offering quicker signals but more false alarms. 
• Combining EMAs and SMAs reduces signal lag and weeds out unwarranted trades. 
• Adjust MA periods to market conditions or personal risk tolerance—there is no absolute “best,” only what consistently aligns with your strategy.  

In summary, the 20-day EMA is often the swing trader’s primary tool, but coupling it with the 50-day and even the 200-day averages can yield clearer, more robust signals.