Charts & technicals
Golden cross and death cross
When a shorter moving average crosses above or below a longer one.
How it works
A golden cross is the 50-day rising through the 200-day; a death cross is the reverse. Both are widely reported in financial media.
Because both averages lag, the signal arrives well after the move that caused it.
Where it misleads people
The historical record for these signals is close to random once transaction costs are included. Their prominence comes from being easy to describe, not from being predictive.
Related terms
- Moving averageThe average price over a trailing window, used to smooth out day-to-day noise.
- Technical analysisStudying price and volume history to inform decisions, rather than studying the business.
- MomentumThe tendency of recent winners to keep outperforming, and losers to keep underperforming, over months.
More in Charts & technicals
All 13 Charts & technicals terms · The full glossary, 433 terms
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