Golden cross & death cross
A golden cross happens when the 50-day average crosses above the 200-day average, a death cross when it crosses below. Both mark a change in the medium-term trend, but with a clear delay.
Why the cross comes late
The 200-day average changes slowly, because each new day is only a small part of it. By the time the 50-day average crosses it, the stock has often moved a long way already. That is why many traders use the cross as a confirmation of the bigger picture, not as an entry signal.
A better way to use it
- As a filter: prefer long trades while price and the EMA50 are above the EMA200.
- Together with structure: check higher highs and lows and trend strength.
- Expect whipsaws: in sideways markets the averages can cross several times within weeks.
Frequently asked questions
Is a golden cross a buy signal?
On its own it is a lagging confirmation that the medium-term trend has turned up. It works better as a filter than as an exact entry point.
SMA or EMA for the golden cross?
The classic definition uses simple moving averages. EMAs react a little faster; the idea is the same.
See it in the screener
The live demo shows every term with example data, right next to the score and its reasons.