How to Trade Golden Vs. Death Cross
What Is a Golden Cross?
A Golden Cross occurs when a short-term moving average (typically the 50-period) crosses above a long-term moving average (commonly the 200-period). This crossover is seen as a bullish signal, suggesting that market momentum is shifting upward and an uptrend may be starting.
The Golden Cross has three distinct stages:
A downtrend ends - Sellers are exhausted, and price stabilizes.
The crossover - The 50 MA rises and crosses above the 200 MA.
The uptrend begins - Buyers gain control, often pushing prices higher.
Most commonly, traders use the 50-day and 200-day moving averages on the daily chart, but this pattern can also be adapted to shorter timeframes like the 1 hour chart.
In fact the 1-hour chart is a sweet spot for active traders. Here’s why:
It gives faster, more actionable signals than daily charts.
It filters out the noise found in lower timeframes like 5 or 15 minutes.
It works great for day traders and swing traders looking to capitalize on short- to mid-term moves.
When the 50-period MA crosses the 200-period MA on the 1-hour chart, it often signals a strong shift in trend—especially when confirmed by price action, volume, or key support/resistance levels. Here’s an example of the Golden Cross in EUR/USD
What Is a Death Cross?
The Death Cross is the exact opposite. It happens when the 50-period moving average crosses below the 200-period average, signaling that bearish momentum is taking over.
This pattern also unfolds in three stages:
The uptrend stalls - Price action flattens or weakens.
The crossover - The 50 MA drops below the 200 MA.
The downtrend takes hold - Sellers dominate the market.
For many investors, a Death Cross is a signal to exit or short the market. For contrarians, it may be a buying opportunity—if the asset is fundamentally strong and oversold. Here’s an example of the Death Cross in Gold.
