15DMA 50DMA BUY

Golden Cross Trading Strategy is used by Intraday trader or positional traders to identify the market trend. This trading pattern is used by traders to identify the short term as well as long term market trend. The golden cross indicates a bull market on the horizon

Golden Cross Trading Strategy is the opposite of Death Cross. It is based on moving average of different time frame.

Golden Cross Trading Strategy

Golden Cross is generally used by traders in 2 different time frames.

 

  1. 15 day moving with 50-day moving average:

Short term or intraday traders mostly use 15-day moving average with the 50-day moving average. When 15-day moving average crosses above 50-day moving average it forms positive momentum or bullish trend.

Here 50-day moving average also acts as a resistance.

Entry Point

15 DMA crosses above 50 DMA= BUY

15DMA 50DMA BUY
15DMA 50DMA BUY

 

Stop Loss

The lowest point of the pattern

Target Price

At the immediate resistance level

Note: Use trailing stop loss along with stop loss to secure your profit.

 

  1. 50 day moving average with 200-day moving average

Long term or positional traders often use 50-day moving average with the 200-day moving average. When 50-day moving average crosses above 200-day moving average it indicates a strong bullish trend for longer time horizon.

Here 200-day moving average also acts as very strong support.

Note: It is believed that larger the chart time frame, the stronger and long-lasting the golden cross breakout tend.

Entry Point

50 DMA crosses above 200 DMA= BUY

50DMA 200DMA BUY

 

Stop Loss

The lowest point of the pattern

Target Price

At the immediate resistance level

Note: Use trailing stop loss along with stop loss to secure your profit.

GOLDEN CROSS STOCK SCREENER

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Common Mistake by Traders

Technical analyst and expert always give the advice to use stop-loss but over smart traders ignore it. As a result, they often made a huge loss.

It is wise to use a trailing stop loss. It will secure your profit and also help to gain maximum profit. But traders often forget to use it while trading.

People generally not prefer to use other technical indicators with cross over. It is advisable for an intraday trader to use some technical indicators like Bollinger Bands, Volume profile, price trends, momentum, and volatility along with crossover. These technical indicators are used to filter the false signal.

Limitations

Crossover cannot be used alone some indicators that are used with a crossover are MACD, RSI and Bollinger Bands.

It is not advisable to use a crossover pattern for a longer time frame. Mostly it is used for short term period i.e. maximum 1-2 day.

If a trader or investor wants to use crossover for longer time frame then they have to use Crossover or Death Cross. Sometimes it gives a false signal.

So, follow the rules guys and you’ll be rewarded. Having said that, I request you to backtest the Golden Cross trading strategy as per your needs and requirement. You can tweak the elements I have used and see what results it produces.

 

I have a lot of other things that also need to be considered and those are something that I will cover in my next post.

 

Golden Cross trading strategy lets you quickly fetch some money from day trading. However, try to exit as early as possible and lock your profits.

 

I believe this strategy will surely help you to make money from online trading.

 

If you want to add some other parameters that make this strategy more profitable, then please comments below. Your views and suggestion are always welcome.

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