The golden cross occurs when a short-term moving average crosses over a major long-term moving average to the upside and is interpreted by analysts and traders as signaling a definitive upward turn in a market.
There are three stages to a golden cross:
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Technical analysis involves the use of statistical analysis to make trading decisions. Technical analysts use a ton of data, often in the form of charts, to analyze stocks and markets.
Both refer to the solid confirmation of a long-term trend by the occurrence of a short-term moving average crossing over a major long-term moving average.
Conversely, a similar downside moving average crossover constitutes the death cross and is understood to signal a decisive downturn in a market.
The death cross occurs when the short term average trends down and crosses the long-term average, basically going in the opposite direction of the golden cross.
They originated in Japan the 1700s, as a way to measure the supply & demand of the rice markets:
When it comes to wealth creation in equity market, investing and trading are the two genres of the field. However, investing and trading are very different approaches of wealth creation or generating profits in the financial market. Imagine, today, you and your friend bought equal amount of seeds to sow in your fields but you sold them to someone in a day because you could earn profit. And your friend sowed the seeds and let them grow for a few years till they gave new seeds. He sowed the new seeds and continued this for years and sold a lot more seeds eventually than were bought.
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