Identifying the Golden and Death Cross in Trading

There are several ways to identify trading opportunities and the golden and death cross indicators are among the perfect ways that that you can identify your opportunity. Today will be talking about the golden and death cross in the financial markets our focus will be on crypto. Let's jump up faster without wasting much of your time.

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The Golden and Death

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Firstly let's look at the above chart in which we have applied the moving average indicator. What can you see on the chart, is two lines that cross each other right.

Based on the chart we have applied, the green line is our "golden cross" which is the 200 MA line, and the red line which is the 50 MA is our "death cross" whereas the blu cross sign is the point where the two lines cross each other. Now before we continue, the golden cross (green line) is a signal for a bullish market, whereas the death cross (red line) is a signal for a bearish market.

Going further with our discussion, the death cross (red line, shorter term) happens when in the chart by crossing below the golden cross (green line, longer line).

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Remember we said the shorter moving average line which is the line of the death cross is a signal for a bearish market which means by the time you have seen that it has crossed below the longer moving average then you should know the market is going bearish. It is an indication of the falling price of the asset you have chosen to trade on or analyze.

The golden cross which is the red line and as well the longer moving average is the opposite of the death cross. Now talking about the golden cross it is when the shorter moving average crosses above that of the longer MA. Let's practically learn how to spot them one after another.

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Identifying the Golden Cross

As we have earlier said the golden cross pattern happens when the longer MA crosses below that of the shorter MA. The cross is a signal for a bullish market as it is an indication of an uptrend market.

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Three phases which are; sustained, crossover, and the uptrend make up the golden cross.

Sustained downtrend:
In this phase, you will see the price action starting in a downtrend with the 50-day MA sitting below that of the 20-day MA.

Crossover:
In this phase the 50-day MA usually crosses above the 200-day MA, indicating a reversal in the price of the asset to an uptrend and forming a golden cross as seen in the chart we have shared.

Bullish uptrend:
In this phase, the uptrend continues and the 50-day MA remains above the 200-day MA which is a confirmation of a golden cross.

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Identifying the Death Cross

As discussed earlier, the death cross pattern happens when the shorter MA crosses below that of the longer MA. The cross is a signal for a bearish market as it is an indication of a downtrend market.

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The death cross is when the longer MA crosses above the shorter MA. Three phases which are; sustainer, crossover, and bearish trend. make up the death cross.

Sustained uptrend:
In this phase, you will see the price of the asset exhibits an uptrend with the 50-day MA moving above that of the 200-day MA.

Crossover:
In this phase, reversal is what you will see which the 200-day MA will cross above that of the 200 days, starting a downtrend and forming a death cross.

Bearish downtrend:
In this phase, the downtrend continues and the 200-day MA remains above the 50-day MA which is a confirmation of a downtrend.

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Disclaimer

_{Today, we have looked a bit dip into what golden and death crosses mean in trading and we have been able to have an understanding of what they are and how they can be spotted. Please take note that this post is not financial advice, but serves as educational content.}

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