The 50-day moving average (50 DMA) is the average closing price over the last 50 trading days, drawn as a line on a daily chart. Traders use it as a medium-term trend guide: price above a rising 50 DMA suggests an uptrend, and pullbacks to the line often act as support. It lags price, so it is best used as a filter for entries and stops rather than a prediction.
The 50-day moving average sits between the fast 20-day line and the slow 200-day line. It covers about ten weeks of trading, which makes it the favourite trend line of swing traders. Here is how it works, how to use it, and where it lets you down.
What it is
Add up the last 50 daily closes and divide by 50. Tomorrow, drop the oldest day and add the newest. The result is a smooth line that follows price with a delay. Because it uses 50 days, it ignores most daily noise and reflects the medium-term direction.
Most charting platforms offer a simple moving average (SMA) and an exponential one (EMA). The simple version is the standard for "50 DMA". The EMA reacts a little faster.
What it tells you
- Trend direction: price above the line and the line rising means a medium-term uptrend. Price below a falling line means a downtrend.
- Trend strength: a steep slope shows strong momentum. A flat line shows a range with no clear trend.
- Distance from the line: price far above the 50 DMA is stretched and more likely to pause or pull back toward it.
Score the Setup Before You Take It
TRADZY's Void Engine rates any setup 0–100 across 12+ variables: structure, trend alignment, volume, momentum and key levels.
Score a Setup Free →Four ways traders use it
1. Trend filter. Only look for long trades when price is above a rising 50 DMA, and for shorts when it is below a falling one. This keeps you with the larger move.
2. Pullback entries. In an uptrend, price often dips back toward the line and bounces. Traders look for a bullish candle there, such as a bullish engulfing, with a stop below the dip. The line is a zone, not an exact price.
3. Trailing stop. Hold a winning trade while price stays above the line and exit on a daily close below it. This turns the line into a simple exit rule.
4. Crossovers. The 50 DMA crossing above the 200 DMA is called a golden cross, and the reverse a death cross. Both are slow, lagging signals. See the 200-day moving average guide.
A worked example
A stock rises from $40 to $55 over two months. The 50 DMA is rising and sits at $49. The stock pulls back to $50 and prints a bullish candle closing at $50.80.
- Entry $50.80. Stop $48.40, below the line and the pullback low. Risk $2.40 per share.
- Target the prior high of $55, which is $4.20 of reward, about 1:1.75. A trader wanting 1:2 would look for a target near $55.60 or trail the stop.
- Risking $100 buys about 41 shares. See position sizing.
If price closes below $48 and the line starts to flatten, the idea has failed.
Where it fails
- It lags. By the time it turns, the move has already started.
- Sideways markets. When price chops around the line, you get repeated false signals.
- Not a precise level. Price often undershoots or overshoots the line, so stops need room.
- Not a strategy by itself. It says nothing about size, targets or how much to risk.
- Different assets, different rhythms. A line that suits a slow index may be too slow or too fast for a volatile coin.
How to set it up
- Add a 50-period simple moving average to a daily chart.
- Note whether price is above or below it, and whether the line is rising, flat or falling.
- Combine it with a level and a confirmation candle. See support and resistance.
- Test the rule before trading it. See what is backtesting and best trading indicators.
- Record each trade so you can see whether the rule works for you. See how to journal your trades.
For a strategy built around it, read swing trading strategies.
FAQ
What does the 50-day moving average show?
The medium-term trend. Price above a rising 50 DMA is generally treated as an uptrend, and price below a falling one as a downtrend.
Is the 50 DMA better than the 200 DMA?
Neither is better. The 50 DMA reacts faster and suits swing trading. The 200 DMA is slower and shows the long-term trend. Many traders use both.
Is the 50-day moving average support?
Often, in an uptrend, price bounces near it. It is a zone rather than a fixed level, and it fails when the trend ends.
What is the difference between the 50 SMA and 50 EMA?
The SMA weights all 50 days equally. The EMA weights recent days more, so it reacts faster and gives more false signals.
Does the 50-day moving average work for day trading?
Not usually. On intraday charts a 50-period average covers only hours, so day traders typically use shorter averages or VWAP.
Put This Into Practice
- Score your next setup 0–100 with the Void Engine before entering
- Log the trade and tag the setup in the TradLog
- Review weekly: keep what pays, cut what doesn't
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Educational content, not financial advice. Trading involves substantial risk of loss.