Golden Cross

A golden cross occurs in three phases:

1. There’s a downtrend where the shorter-term MA is below the longer-term MA.

2. The market reverses and the shorter-term MA crosses over the longer-term MA. 

3. A continued uptrend starts and the shorter-term MA stays above the longer-term MA.

When considering a golden cross, the most commonly used moving averages are the 50-period (the previous 50 hours, days, weeks, etc.) and the 200-period moving average. Many other moving average pairs may be used, as the main idea is simply that the shorter-term average price is crossing above the longer-term average price. For example, day traders may use the 5-period and the 15-period moving averages to find quick entry and exit targets. Other common examples are the 15-period and the 50-period, or the 100-period and the 200-period moving average pairs.

Generally, as with any chart pattern, higher-timeframe signals are typically more reliable than lower-timeframe signals. As such, a golden cross on the daily chart will probably have a more significant impact on the market than a golden cross on the hourly chart.