What's the biggest weakness of a moving-average crossover strategy when the market is stuck in a sideways range?
The biggest weakness of MA crossover strategies is whipsaw โ repeated losses in a sideways, range-bound market. When price moves without a clear trend, the short and long moving averages keep grazing past each other, firing golden-cross and dead-cross signals in quick succession. Trading every signal in that environment racks up small losses. This compounds with the fact that moving averages are a lagging indicator based on past prices.