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Golden Cross Trading Strategy Guide

Last Updated: April 21, 2021

By Rayner Teo

Have you heard of the Golden Cross signal?

If you listen to the media, you’ll hear about the Golden Cross (like how the market is bullish when it occurs).

But is it true?

Well, that’s what you’ll learn today…

Specifically, I’ll cover:

  • What is the Golden Cross and how does it work
  • How NOT to trade the Golden Cross
  • How to use the Golden Cross and improve your winning rate
  • Golden Cross: How to better time your entry with this ONE simple technique
  • How to ride long-term trends with the Golden Cross

Or if you prefer, you can watch this training video below…

What is a Golden Cross and how does it work?

The Golden Cross is a bullish phenomenon when the 50-day moving average crosses above the 200-day moving average.

Here’s why…

When the market is in a long-term downtrend, the 50-day moving average is below the 200-day moving average.

However, no downtrend lasts forever.

So, when a new uptrend begins, the 50-day moving average must cross above the 200-day moving average — and that’s known as the Golden Cross.

An example of a Golden Cross chart…

Netflix Daily Timeframe:

Pro Tip: The opposite is the Death Cross — when the 50-day moving average crosses below the 200-day moving average.

Now some of you are probably wondering:

Is there anything magical about the 50 and 200-day moving average?


There’s no magic to it.

You can use the 49-period and 199-period for all you want and it will not matter.


Because the concept is what matters (which is the short-term trend showing signs of strength against the long-term downtrend).

The moving average is only a tool to define the trend.

Moving on…

How NOT to trade the Golden Cross

Now I know what you’re thinking…

Let’s go long when the 50MA crosses above the 200MA and sell when it crosses below — and make a ton of money!

Well, not so fast my young padawan.

Because in a range market, the Golden Cross will cause many losses (otherwise known as a whipsaw).

Here’s an example…

Gilead Daily Timeframe:


Unless you know what you’re doing, I don’t suggest “blindly” trading the Golden Cross.

Instead, there are better ways to trade it and I’ll tell you more in the next section.

Read on…

How to use the Golden Cross and increase your winning rate


If you’re the type of trader who always can’t seem to decide whether you should be long or short, then this trading technique is for you.

Because the Golden Cross can act as a trend filter so you can trade on the right side of the markets (and increase your winning rate).

Here’s how it works:

If the 50MA crosses above the 200MA, then you’ll look to long only.

Or if the 50MA crosses below the 200MA, then you’ll look to short only.

Here’s what I mean…

Look for long setups when the 50-day crosses above the 200-day Moving Average…

S&P 500 Daily Timeframe:

Look for short setups when the 50-day crosses below the 200-day Moving Average…

Amazon Daily Timeframe:

Now, don’t get me wrong.

It doesn’t mean go long immediately when the 50MA cuts above the 200MA.

Instead, it means you have the “permission” to look for long trading opportunities when the 50MA cuts above the 200MA — a big difference.

For example:

If a Golden Cross occurs, then you can look for bullish trading setup like a Flag Pattern, False Break, Triangles, etc (which I’ll cover more later).

Does it make sense?


How to use the Golden Cross and increase your winning rate — for stock trading

Individual stocks are “influenced” by their respective stock index.

For example:

Yangzijiang would be affected by what STI is doing rather than S&P 500.

That’s why you get the saying…

“A rising tide lifts all boats.”

In essence, if the index is bullish, then chances are the stock will move higher.

So how do you apply the Golden Cross to stock trading?


You overlay the Golden Cross to the stock index.

For example:

If a Golden Cross occurs on the S&P 500, then it means you want to be bullish on stocks within the S&P 500 index.

But does the Golden Cross really work?

Check this out…


This shows the returns after 1 month, 2 months, 3 months, 6 months, and 1 year after the Golden Cross occurs on the S&P.

Clearly, the Golden Cross has a positive bias, and the market is likely to head higher after it occurs.

And in the next section, you’ll learn how to better time your entry when trading the Golden Cross.

Read on…

Golden Cross Trading Strategy: How to better time your entry using this ONE simple technique

Now, you don’t want to go long just because you spot a Golden Cross.


Because you could be entering when the market is “overextended” — and about to reverse lower.

The solution?

You can use multiple timeframes to better time your entry.

Here’s how it works:

1. Identify a Golden Cross on the higher timeframe
2. Look for a trading setup on the lower timeframe (like Ascending Triangle, Bull Flag, etc.)

Here’s an example:

Amazon Daily Timeframe: Golden Cross

Amazon 4-Hour Timeframe: A Bull Flag pattern on the 4-hour timeframe

The beauty of this method is you’ll have a better entry, tighter stop loss, and a more favorable risk to reward.

But the downside is you might miss the move if can’t find a valid trading setup.

How to ride MASSIVE trends with the Golden Cross

Here’s a fact:

If you want to ride massive trends in the market, you cannot have a target profit.

Because a target profit limits your profit potential?

It’s like saying…

“Hey Mr. Market, don’t give me too much profits. I’ve had enough.”


You must trail your stop loss.

This means as the market moves in your favor, you’ll “lock in” your gains but still give your trade room to breathe — should the price moves further in your favor.

And one way to go about it is using the Golden Cross as a trailing stop loss.

Here’s how…

If you’re in a long trade and the market moves in your favor, then you’ll hold the trade till the 50-day crosses below the 200-day Moving Average.

Here’s what I mean…

AMD 4-Hour Timeframes:

Now I’ll be honest.

A trailing stop loss is not easy to execute.

Because often, your winners will become losers as you try to ride the trend — and that’s the price you must pay.


So, here’s what you’ve learned today:

  • A Golden Cross occurs when the 50-day crosses above the 200-day moving average (and vice versa for a Death Cross)
  • Be careful of “blindly” trading the Golden Cross because the market can whipsaw you
  • You can use the Golden Cross as a trend filter, look to buy only when the 50-day is above the 200-day moving average
  • You can ride massive trends with the Golden Cross and exit your trade only when the 50-day crosses below the 200-day moving average

Now over to you…

How do you use the Golden Cross in your trading?

Leave a comment below and share your thoughts with me.

  • Entry on small time frame ,some pattern like hammer etc at the golden cross ,a support at the cross

  • Hey. Hey, first time I heard about this golden cross and death cross. Sound interesting. Hopefully I can learn more. Tqvm Rayner, for showing all the useful tactics.

  • Hi, I would like to know more about this golden cross. If I am an intraday trade can this strategy work? If the golden cross is at 4hour time frame or in 15min time frame. How can I better my entry in these two time frames?

    • Hey there Lebohang, the main purpose of the golden cross is to have a trend bias

      Feel free to use it on the daily timeframe or in the 4-hour timeframe to identify whether you’d be long or short, then drill down the lower timeframes to time your entry!

  • Thank you Rayner for all you do. However, I have a question.
    What type of MA are these exactly also what settings?

    SMA or EMA
    Also is it to apply to close,open,high, weighed close or which exactly. I use MT5 trader app.

    • Hey there Mayowa,

      Rayner uses the EMA, but it doesn’t matter whether it’s EMA or SMA (Simple Moving Average)!

  • CAN I trade the Golden cross with stochastic. Where I use stochastic as an area of value. Then buy when it crosses above 20. For long trades

    • Sure!

      The Golden Cross can be used as a trend filter, while your stochastic can be used for entry triggers!

  • Thanks for sharing it..I am sure if we use the methodology along with trading setup it should work fine most of the times.

  • Hi Rayner.. thank you very much for sharing it. I’d like to know ur thought, is it applicable to crypto market too? I watched most all of ur yt, it’s very helpful for me.

    • Hey there Ketut, the Golden Cross is also applicable to the Crypto market, but since the Crypto market is quite volatile, we do suggest using tighter moving average periods.

      I hope that helps!

  • Hi,

    Most of the 200 and 50 I have used. I noticed that the 200 is always crossing the 50 above. How can I setup the way that the 50 will cross the 200?


    • Hey there Violet, I’m not sure what you mean, but if the 200 MA is above the 50 MA, it means that it’s a death cross (opposite of golden cross)

    • As of now, we suggest that you apply it on a daily timeframe as we have shown you statistics that this concept works.

      You are free to try it on the lower timeframes though, by applying the same concepts taught but in a different timeframe.

    • Hey Abisola, if there’s anything that troubles you to understand the article, do let me know and I’ll help you out!

    • Depends on the market, but due to the volatility of the lower timeframes, other tools could be better suited

    • Hey Andy, not really!

      Though we do recommend using the Golden Cross as a trend filter, then use price action to enter trades

    • Currencies tend to be more volatile, so while you can use it in currencies, we suggest you trade it for stocks mostly!

  • Hi, thanks for this educational article, I am just starting with small trades.
    Golden cross means look for buying.
    Dose long trade means buying?

  • Thanks buddy,I have been looking for this content for a long time,now I can watch the video as well,and then backrest it.

  • If a death cross occurs at daily time frame and golden cross occurs at lower time frame following the price action then its a long opportunity.

    • Hey there John,

      If you are referring to take profits partially and automatically, you can manually set a sell limit order in advance on your current position!

      But for CFD forex brokers, you’d need an expert advisor or an external tool for this (else you’d have to do everything manually)

  • Rayner, I am a trend trader which uses a 15 min timeframe and my higher timeframe is 1 hr, can I use a Golden Cross technique?

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