Golden cross and death cross
A golden cross is when the 50-day average rises above the 200-day average. A death cross is the reverse. Both are named versions of a moving average crossover on daily bars.
How Golden cross and death cross is calculated
Take the 50-day and 200-day simple moving averages of the daily close. The golden cross is the day the 50-day line finishes above the 200-day line after finishing below it the day before. Because the 200-day average needs 200 bars, the first signal on any chart appears no earlier than bar 200.
How it is read
Commentators use the pair as shorthand for a long-term trend turning up or down. Because both lines are slow, the cross arrives well after the price move that caused it.
Common mistakes
- Reading the name as meaning. A golden cross is a calculation, not an event with a cause.
- Quoting a handful of famous crosses. Few daily-bar crosses exist on any one asset, so the sample is small.
- Comparing with the market without stating costs, dates and what happens between signals.
Test it yourself
Build it with SMA 50 crossing above SMA 200 on daily bars. The Lab supports lengths up to 200. The Lab charges trading costs on every trade, fills on the next day's open, and shows how many attempts you have made.
What Tickfloor tested
Tickfloor's research desk has backtested 678 strategies, net of modelled trading costs. After correcting for the 761 tests run, 0 passed. That does not prove no strategy works. These are historical diagnostics, not validation under Testing Standard v2: the backtest harness predates that standard and has not been re-run to meet it.
- Golden Cross / Death Cross (claim test)
- Crypto 200-day line, golden cross and Uptober (claim test)
- The 200-day rule on SPY (claim test)
Related concepts
General information only. It doesn't consider your objectives, finances or needs. Tickfloor holds no financial services licence and never places trades.