Golden Cross

A Golden Cross is a technical indicator visible when the 200-day moving average is eclipsed by the 50-day moving average for a particular asset. It is the opposite of the death cross which happens when the 200-day moving average is crossed below by the 50-day moving average.

A golden cross is considered a bullish signal since the markets tend to rise every 6 to 12 months. However, one must have more than one confirmation to enter a market. Golden cross takes more time than other technical indicators to predict the bullish market as it compares the past market with the current market.

Three stages are involved while reading a golden cross. The first stage starts with a downtrend below the slow moving average. The second stage of the golden cross is triggered when the prices stop moving down and start to approach the slow moving average. The prices begin to cross the slow moving average in this phase and this is when the golden cross appears. The golden cross is confirmed once the fast moving average follows the price crossing over the slow moving average.