The so -called Golden Cross is considered a purchase signal on the stock exchanges. These strategies use experienced traders.
• Golden Cross, the counterpart to the Death Cross
• A bullish signal
• Use in combination with other indicators can make sense
The “Death Cross” is a chart -technical signal that should be familiar to many investors. There is also a kind of Bullishes counterpart to this death: the golden cross or golden cross, which arises when the short -term moving average thwarts the long -term upwards. This is an indication that an asset probably has a positive momentum, so this intersection point indicates a potential long -term upward trend. The periods under consideration differ depending on the trading contractions, for example, the 50-day and 200-day line are used in the chart.
Trading strategies with the Golden Cross
Because of its simple interpretation and application, which is also suitable for beginners in practice, the Golden Cross is one of the most popular chart technology signals. But how can money be earned specifically on the stock market? Basically, there are two ways in trading to use the Golden Cross.
On the one hand, this formation can serve as a direct entry and sales signal, which means that you get into a long-term trade after the Golden Cross has appeared. A share is bought or invested in an index as soon as the 50-day line crosses the 200-day line. If the 50-day line falls back under the 200-day line, the position is closed again. Investors who rely on this gold cross strategy are therefore not invested all the time, but only as long as the 50-day line above the 200-day line runs.
Other traders, on the other hand, focus on short -term chart signals. They expect a higher probability of success if the outbreak from the short -term formation in the direction of the long -term trend takes place. The Golden Cross serves as a hint or confirmation of the long -term trend.
Practical tips
Trader Christian Böttger divided two good tips on this topic on “Finanzradar”: On the one hand, he recommends that he does not choose the period for the shorter sliding average, otherwise you run the risk that this will be falsified too much by short -term price fluctuations. Furthermore, he advises a significant distance from the two moving average, otherwise the meaningfulness of the Golden Cross is no longer available as a trend reversal indicator.
Editor finance.net