Gold Cutting Strategy - Overview

A Gold Cross occurs when a short period moving average crosses the long cycle moving average above the daily time frame. Normally, we will use the MA 50 and MA 200 lines to create a crossover signal.

Gold Crossing is a signal that the market increases in the medium and long term, even after Gold Cut, the market has continuously increased for several years without any opposite intersection. So just from 1 simple signal can make huge profits.

The Death Cross, in contrast to the Gold Cross, shows the market's mid-term downtrend.

The origin of the Gold Cut is from the stock market, but it is completely applicable to crypto, commodities, precious metals because nature is just supply and demand. We will use the simple moving average - moving average called the MA for convenience.

The time frame will be the day - daily - D1. This is the framework that stock traders used in ancient times to trade, so avoid trading Gold Stop signals on frames lower than D1.

Gold crossings of US stocks, stock indices such as the S&P 500, Dow jones all brought great performance, all over 70% over the years. The worst year with the S&P500 index, the gold cross signal is 11% yield.

Gold Cross - Complete strategy

Keep in mind that if you only buy and sell blindly according to Gold Cut, you are likely to lose heavily. Because it is just a signal that the market is turning to bullish, not a signal to buy right away. If we buy according to the Gold Cut we will not know where to place the stop loss.

On EURJPY D1 we have MA 50 red, MA 200 blue:

Notice that by the time the intersection happened, EJ HAS INCREASED VERY BIG. And if you buy it right when the intersection occurs, the price will decrease by a very heavy phase before going up again. Will your stop-loss withstand such a deep drop?

Therefore, we need a complete system to trade with Gold Cut, which cannot be traded at large.

Buy order rules:

  • MA 50 cuts MA 200 from bottom-up
  • Entry is bought at the first hit of the MA 200 after the cross
  • Measure the distance from MA 200 to MA50 at buy position, using that distance as the stop loss.

For example:

Entry BUY at the blue arrow, measure the distance with the red arrow to find the SL.

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