Hi,
Golden Cross in years gone by may have been a reasonable entry condition. This is less the today case especially with an index or currency pair. You are competing against machines which means that by the time you see the GX on your your chart, other systems are taking their first profits and hitting their soft targets. Using this condition for an entry means you’ll likely be in draw-down for a large amount of time because you are “late to the party”. With increased volatility the large price-to MA distance upon GX can mean you’re missing fair value by a significant degree. If you are using this system then it often pays to wait for the profit taking and get in at fair value if the price-MA distance is large.
GX is a lagging confirmation signal comprised of not 1 but 2 lagging indicators. It does have its uses. It might support staying in a position that you already have; it’s also good for confirming a stop loss scenario (which is a contributing factor to why you see a price revisit to the longer term MA straight after the MA cross happens).
The question to ask is: What combination of indicators in lower time-frames will suggest a high potential GX scenario in the time-frame above? Ideally you want to be “in” before the cross happens and risk-free after it occurs. Explore non-temporal resolutions with GX setups to get a deep understanding of what the “machines” see.
Hope this helps
