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What is a golden cross? What is the difference between a golden cross and a death cross?

2022-03-23
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  In gold foreign exchange trading,there are various trading methods,one of which has a higher winning rate and is very practical is to use the running of the moving average to determine the buying and selling points and trends.There are two types of crosses,one is the golden cross and the other is the death cross,referred to as"golden cross"and"dead cross."In a nutshell,the moving average cross is a technical chart form,and the process of running on the moving average(ie,moving average)Medium,the cross between the short-term moving average and the long-term,and the golden cross specifically refers to the cross formed by the short-term moving average crossing the long-term moving average from a low level to the top,and a dead cross is the opposite.The formation of a golden cross usually represents a potential bullish signal and Bullish trend,Sicha represents potential bearish signal and bearish trend.

  Everyone will hear this word when using many technical indicators,mainly including moving averages,KD indicators and MACD indicators.

  This article mainly introduces the signal application of the golden cross and the death cross,focusing on the following two parts:

  1.What is the Golden Cross?

  2.What is Death Cross?

  In the process of using actual combat cases to explain the golden cross and the death cross,let's take the moving average as an example.The moving average is the core of this article,and the MACD and KD indicators are also picture indicators derived from the moving average indicator,so the usage is consistent.

  What is the Golden Cross?

  Golden Cross,English GoldenCross,refers to the short-term moving average crossing the long-term moving average from the bottom to the top to form a cross,which is considered a bullish signal from the perspective of technical analysis.Generally speaking,when the short-term moving average is below the long-term moving average,it means that the short-term price trend is down compared with the long-term price trend.If the short-term average price is higher than the long-term average price at this time,it represents the direction of the market trend.There may be a shift happening,which is why the golden cross is considered a bullish signal and the rationale for its formation.

  The following is an explanation of the actual combat case,taking the moving average,MACD and KD indicators as examples.

  Example:Spot Gold Golden Cross Analysis

  In the 1-hour chart of gold,the price of gold was originally in a downward trend.The 10-day moving average(black),the 20-day moving average(orange),and the 60-day moving average(blue)all showed a short arrangement.Then the decline slowed down and the 10-day line crossed the 20-day line from bottom to top,forming the first bullish golden fork,hitting the bottom and rebounding.Then the short-term moving average went up and crossed the 60-day line again,forming a larger level of bullishness.The golden cross indicates that the bullish trend is stronger and further bullish formations are formed.With the acceleration of the short-term moving average,the mid-and long-term moving averages rise,and the short-term,medium-term,and long-term moving averages are arranged in a long position from bottom to top.At this time,the price trades above the moving average,and the moving average acts as a support.When the 10-day line and the 20-day line cross the 60-day line and run above the 60-day line,it is usually regarded as a symbol of the establishment of a bullish trend.As long as the 60-day line runs and the golden cross is formed again in the later period,it is continued to buy.Signal.

  Example:USD/JPY Gold Cross Analysis

  The USD/JPY exchange rate bottomed out,the short-term moving average crossed the long-term moving average,the 10th and 20th line crossed the 60-day line and remained above the 60-day line,the trend turned from bearish to bullish,and the price remained at the strong support of the 60-day line.,indicating that the exchange rate is expected to rise further,and then there were two golden cross signals on the 60-day line,both of which were buy signals.

  What is a death cross?

  Death Cross,English DeathCross,referred to as Sicha.A dead cross is when the short-term moving average crosses the long-term moving average from top to bottom,and is generally considered a bearish signal.The principle is that when the short-term moving average is lower than the long-term moving average,it means that the short-term price trend is down compared with the long-term price trend,which means that the market trend at this time is bearish.

  Example:EUR/USD Death Cross Analysis

  In the EUR/USD daily chart,the exchange rate was originally in an upward trend,and the moving averages showed a neat arrangement of longs.Then the exchange rate slowed down and fell back when it encountered resistance at a high level.At this time,the 10-day moving average crossed the 20-day moving average from top to bottom to form a death cross.,and then crossed the 60-day moving average to form a larger level of dead fork to form a short moving average arrangement.With the accelerated decline of the short-term moving average,the medium and long-term moving averages declined,and the short-term,medium-term,and long-term moving averages were arranged in a short position from top to bottom.At this time,the price traded below the moving average,and the moving average acted as a resistance,and the subsequent price formed a dead cross below the 60-day line.Considered a continue sell signal.

  Example:GBP/USD Death Cross Analysis

  In the 1-hour chart of GBP/USD,the exchange rate fell from top to bottom and crossed the moving average.MA10,MA20,and MA60 formed a death cross and fell after winding.At this time,the bearish signal was established,and then the exchange rate maintained the strong resistance of the 60-day line and ran again.A dead cross signal that appears can be seen as a bearish sell.

  What is the difference between a golden cross and a death cross?

  The golden cross mainly has the following two characteristics:

  1.The golden cross represents a faster(short-term)price or moving average,which crosses a slower(long-term)price or moving average from bottom to top,which is usually a signal indicating an upward trend in the future.

  2.After the formation of the golden cross,the short-term moving average always runs above the long-term moving average.At this time,the long-term moving average is regarded as support.After that,as long as the price does not fall below the long-term moving average support,it can be regarded as a continuation of the rally.

  Death cross mainly has the following two characteristics:

  1.A dead cross represents a faster(short-term)price or moving average that crosses a slower(long-term)price or moving average from top to bottom,and is usually considered a signal that the future trend will be down.

  2.After the dead fork is formed,the short-term moving average always runs below the long-term moving average.At this time,the long-term moving average is regarded as resistance.After that,as long as the price does not break above the long-term moving average resistance,it can be regarded as a continuation of the downward trend.

  In addition,it should be noted that golden crosses and death crosses are lagging indicators,not leading indicators,and have a certain lag,because they show market trends after price changes occur.The indicator can only be used as a signal reference.It is not absolutely accurate and cannot guarantee how long the trend will last.For different trading styles,you need to pay attention to choosing different trading frameworks to achieve the best trading results.

  When using the moving average crossover technique,the use of time frames must be taken into account.Generally,intraday traders recommend using a shorter time period.The frame of ultra-short-term trading can be as short as 5 minutes,10 minutes,and 15 minutes moving average charts,while intraday swing traders recommend using 1 hour,4 hours or daily line.The moving average chart of high time frame,combining the chart trends of various cycles can find the resonance between them.When there are two or more cycles with a golden fork or a dead fork resonance signal at the same time,the probability of success will be great.promote.

  The above is the technical explanation about the golden cross and the death cross.In addition to the moving average,this technique can also be applied to the derivative indicators MACD and KD indicators,and a variety of charts can be combined to find more resonance signals.The mutual market provides cutting-edge financial trading terminals and powerful and concise charting functions.There are nearly 100 indicators to choose from and supports the indicator import function,seamlessly linking global market quotes,one-click order placement,stop loss/take profit,choose one A good platform investment will naturally get twice the result with half the effort.

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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