How to Trade Golden vs. Death Cross

In the world of technical analysis, few patterns are as iconic as the Golden Cross and Death Cross.

Hey Prop Traders, here’s are some valuable tips, terms explained and prop firm news for June 10, 2025

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Golden Cross vs. Death Cross - How to Trade Them

In the world of technical analysis, few patterns are as iconic as the Golden Cross and Death Cross. These crossover signals, based on moving averages, are used by traders to identify potential shifts in market momentum, and when used correctly, they can offer high-probability setups for both short-term and long-term trades.

But what exactly are these crosses, how do you trade them, and which timeframe gives the best signals?

🔶 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:

  1. A downtrend ends - Sellers are exhausted, and price stabilizes.

  2. The crossover - The 50 MA rises and crosses above the 200 MA.

  3. 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:

  1. The uptrend stalls - Price action flattens or weakens.

  2. The crossover - The 50 MA drops below the 200 MA.

  3. 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

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