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The Golden Cross

The Golden Cross
Written by
Dawson Ignatieff
Dawson Ignatieff
Published on
May 1, 2024
Read time
3
 min read

Golden Cross

Alright, lads, I am sorry about all this TA (I am still straight) but I thought I would teach one more super effective and powerful indicator. I am going to keep this short because after years of shitting on TA, it pains me to even preach this, I am a shell of a man, I can barely look myself in the mirror.

All jokes aside, tap into this. It’s simple and effective.

What is the “Golden Cross”

Last week we covered what the “Moving Average” was.

“Moving averages smooth out price data over a specified time period to help identify the trend direction and reduce the impact of price volatility. They are calculated by taking the average price of a security over a set period, such as 50 or 200 days, and are frequently used in technical analysis to gauge market momentum.”

So all you need to set up the Golden Cross is to use both a 50-day Moving Average and a 200-day Moving average at the same time!

Crazy eh.

So when that 50-day Moving Average Crosses above the 200-day Moving average this is considered a significant event because it signifies a turning point where short-term momentum is outpacing long-term momentum, indicating increasing buyer interest and potential upward price movement.

In other words, “ wen we see the 50-day line cross above the 200-day line u buy stok, bcuz stok probably going to go up after. Little cross make stok go boom.” Also, it makes a damn cool visual.

Inputting this into a chart is very easy and any charting program should allow you to input a 50 & 200-day Moving Average. Some will even have a Golden Cross preset.

trading view indicators section has plenty of presets

Now if you wanna get really fancy like myself, use this Golden Cross alongside other bullish indicators to really narrow down the juice and find yourself a winner! Two other indicators to line it up with to help ensure success.

1.) Unusual Trading Volume (50% or more than its daily average)

2.) Low float (stocks with under 30m shares out)

If you can find a stock undergoing abnormal volume on the day of the golden cross, with a low float. You could be in for a ride!

All in all, just using these won’t make you rich, these indicators should only be used on companies you are fundamentally bullish on as well and that you understand, if you go blindly trade, you will eventually lose it all.

Also, if you are too lazy to chart this yourself, you can input these indicators into a scanner to scan all stocks for you, there are several scanners out there but this one is free and easy - Stock Scanner

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