I tested the golden cross trading strategy 200 times, and this is what happened.
This is what the golden cross looks like, and as you can see, there is nothing golden about it.
Maybe the creator of this indicator was colorblind, or maybe they meant a golden opportunity when the golden cross appears.
But here’s how I tested the strategy.
The golden cross is made up of two moving averages: a 50-period simple moving average and a 200-period simple moving average.
When the 50-period moving average crosses above the 200-period moving average, it’s a golden opportunity to buy. Something like this.
In my testing, I also made sure the price was above the two moving averages when the cross appeared.
The stop-loss goes below the golden cross in a long setup.
I set the profit target at 1.5 times the stop-loss distance.
If the 50-period moving average crosses below the 200-period moving average, it is called a death cross, and it says to take a short entry.
The stop-loss goes above the crossover.
But the thing is, in the mostly good trending market, I have tested the golden cross strategy before.
There, it had around a 42% win rate with a 1.5-to-1 reward-risk ratio.
The breakeven win rate with that ratio is 40%.
So, this strategy barely made any profit, as you can see on the profit graph.
The profit line moved in a sideways direction instead of continuously moving up.
But what will happen to the golden cross if I take 100 trades in an extremely good, trending market?
Will it give a really high golden win rate?
On the other hand, how badly can the win rate suck if I take another 100 trades in an extremely bad market where the price is not trending at all?
To find out, I went to the Gold/USD one-day timeframe and added a 9-period exponential moving average to the chart.
If the price was clearly staying above this 9 EMA, I saw it as a trending price movement and took 100 trades in it for the extremely good market test.

If the price was not clearly trending above the 9 EMA, or was ranging, choppy, or just slow, then I saw it as a bad market.
And took 100 trades in it for the bad market test.
I also drew red boxes around the bad market.
And since Gold/USD has been moving in an uptrend in the long run, I only took long trades on it.
But I did this good-and-bad-market filter only on the 1 day timeframe.
The entry timeframe where I took trades with the Golden Cross was 30 minutes.
So here’s what happened when I took 100 trades in the extremely good market.
One might think that since the Golden Cross was mainly designed as a bullish entry point, it should give a really high win rate in an extremely good, uptrending market.
Well, it did, but with a twist.
You see, the profit graph was excellently going in an upward direction pretty much from the start.
It won 13 trades in a row and only lost 3 trades in a row.
The strategy even managed to make a 72% profit on the account by risking only 1% per trade.
The only problem is that in an extremely good market, you will literally grow old by 20 years, and this strategy would still not have given 100 trading opportunities.
I mean, at the end, it gave a really high 76% win rate.
But it only found 78 trades in, like, 20 years.
I literally ran out of candlestick data on the 30-minute timeframe before finding 100 trades with this golden cross strategy.
Even though the profit graph went in an upward direction pretty nicely, you can literally take a low-win-rate strategy and make more money in total by just taking more trades.
Almost all strategies we have tested in this testing series would have made multiple times more profit in the same duration than this.
But before we compare it with other tested strategies, we need to take 100 trades in the extremely bad market.
At first, the profit graph started to move in an upward direction, even in the bad market.

But that only lasted for a little while because then the profit graph started to move down and became flatter.
In the bad market, or the slow, ranging, choppy market, the golden cross strategy was giving enough entry points and managed to win around 3 trades in a row but lost 6 trades in a row.
At the end, it lost 5% of the account, with a 1% risk per trade.
After 100 trades, the golden cross strategy got a 38% win rate, which is slightly below the break-even point.
Overall, the profit graph is moving in a sideways direction or a very slow downtrend.
It doesn’t look as scary as some of the other popular strategies we have seen in this testing series.
Some popular strategies were losing money like a strong downtrend.
Let’s give it a Trading Rush score and compare it with other strategies we have tested so far.
In the previous “mostly good market” test, the golden cross strategy had around a 4.2 out of 10 score in the win rate category.
Overall, it had around a break-even score in other categories as well.
The main advantage of this indicator was how easy it is to use.
But in the extremely good market, the golden cross strategy gets a 0 out of 10.
You will hit your retirement age before this strategy makes you enough money.
The easy-to-use score stays the same at 7.5 out of 10.
But for the rest of the categories reliability, consistency, and quality it gets a 0 out of 10 because it didn’t give enough trades to rate them properly.
That brings the total TR score in the extremely good market to 7.5.
That is the lowest score a strategy has achieved, even in the good market.
The Money Flow Index also had a zero score in most categories because it also didn’t give any trades in, like, 20 years.
In the extremely bad market, the golden cross gave enough trades.
It had a 38% win rate, so it gets a 3.8 out of 10 in the win rate category.
The highest score in this category is 4 out of 10, so 3.8 out of 10 is not a bad score for the “extremely bad market.”

The easy-to-use score is 7.5 out of 10.
Since it didn’t make any profits, the “consistency of profit” score is 0 out of 10.
The reliability and quality of trade score is 3.8 out of 10.
That brings the total TR score in the extremely bad market to 18.9.
That is the fourth-highest score out of all the strategies we have tested in the extremely bad market so far.
So, in the mostly good market, the golden cross barely makes any money.
And you will probably get around the break-even win rate.
But in the extremely good market, it gets a really high win rate.
But it’s also kind of useless because by the time this strategy gives enough opportunities, you will get old, AI will take over, and the market will be run by AI overlords.
In the extremely bad market, it doesn’t make money and will probably get around the break-even win rate, just like it does in the mostly good, trending market.
We have tested way better strategies than this.
It’s better to use them instead of golden cross.
Thanks for watching.