Индикаторы Forex Killer

What Is a Death Cross?

The "death cross" is a market chart pattern reflecting recent price weakness. It refers to the drop of a short-term moving average—meaning the average of recent closing prices for a stock, stock index, commodity or cryptocurrency over a set period of time—below a longer-term moving average. The most closely watched stock-market moving averages are the day and the day.

Despite its ominous name, the death cross is not a market milestone worth dreading. Market history suggests it tends to precede a near-term rebound with above-average returns.

What Does the Death Cross Tell You?

The death cross only tells you that price action has deteriorated over a period a little longer than two months, if the crossing is done by the day moving average. (Moving averages exclude weekends and holidays when the market is closed.)

Those convinced of the pattern's predictive power note the death cross preceded all the severe bear markets of the past century, including , , , and That's an example of sample selection bias, expressed by using only the select data points helpful to the argued point. Cherry picking those bear-market years ignores the many more numerous occasions when the death cross signaled nothing worse than a market correction.

According to Fundstrat research cited in Barron's, the S&P index was higher a year after the death cross about two thirds of the time, averaging a gain of % over that span. That's well off the annualized gain of over 10% for the S&P since , but hardly a disaster in most instances.

The track record of the death cross as a precursor of market gains is even more appealing over shorter time frames. Since , the 22 instances in which the day moving average of the Nasdaq Composite index fell below its day moving average were followed by average returns of about % over the next month, % in three months and % six months after the death cross, roughly double the typical Nasdaq return over those time frames, according to Nautilus Research. The 23rd such occasion occurred in February

Other recent surveys of returns following a death cross have also found a positive correlation with outperformance.

Intuitively, the death cross has tended to provide a more useful bearish market timing signal when occurring after market losses of 20% or more, because downward momentum in weak markets can indicate deteriorating fundamentals. But its historical track record makes clear the death cross is a coincident indicator of market weakness rather than a leading one.

Example of a Death Cross

Here is an example of a death cross on the S&P in December of

It led to headlines describing "a stock market in tatters." The index proceeded to lose another 11% over the next two weeks and a day, The S&P then rallied 19% from that low in two months, and was 11% above its level at the time of the death cross less than six months later.

Another S&P death cross took place in March during the initial COVID panic, and the S&P went on to gain just over 50% in the next year.

These examples don't represent the full range of possible outcomes after a death cross, of course. But they are at the very least more representative of current market conditions than earlier death cross occurrences.

Death Cross vs. Golden Cross

The opposite of the death cross is the so-called golden cross, when the short-term moving average of a stock or index moves above its longer-term moving average. Many investors view this pattern as a bullish indicator, even though the death cross was typically followed by the bigger gains in recent years.

The golden cross can indicate a prolonged downtrend has run out of momentum.

Limitations of Using the Death Cross

If market signals as simple as the interaction between the day and the day moving averages had predictive value, you would expect them to lose it quickly as market participants tried to take advantage. The death cross makes for snappy headlines but in recent years it has been a better signal of a short-term bottom in sentiment than of an onset of a bear market or recession.

com/forex-blog/double-bollinger-band-macd-stochastic-crossover-forex-
strategy

Double Bollinger Band, MACD, Stochastic Crossover Forex Strategy

For any forex trader actively trading the markets, it’s always critical to know what the ongoing trend is, and at
least equally so important (if not more) is whether or not a trend exists at all or not at a particular time.

This strategy is designed to give all of this precise information based on which any trader can make a better,
more informed and more profitable trading decision.

We are going to use three popular technical indicators to trade this system:
 Bollinger Bands
 Stochastic 

 MACD

However, we are going to use them in a special kind of way. Essentially in a way where each of them confirms
the signal from the other indicators and therefore hugely stacking the probabilities in our favor. 

Of course, as always we can add support and resistance to further enhance the system.

Specifically for this strategy, the parameters used for the indicators are as follows:
 Stochastic period: 5, 5, 3
 MACD periods: 12, 26, 9

 Double Bollinger Band – both of period 20

The deviation of one Bollinger Band (BB) is 2 while for the other is 1. In our examples here on the charts, the
black BB is with the standard deviation of 2 while the blue BB is with the standard deviation of 1.

If there is no native option to add a double Bollinger Band in your trading platform you can always add 2 BBs
where one is with a standard deviation of 1 and the other is with a deviation of 2.
Entry rules:

1. Price needs to cross and trade inside of the upper bands (in an uptrend) or inside of the lower bands (in
a downtrend).
2. The stochastic indicator should be pointing to the same direction of the trend as the Bolinger Bands (so
it should be bullish when there is the bullish signal of the BB). Preferably the crossover on the
stochastic occurs from oversold or overbought levels.

3. The final confirmation is with the MACD which should also show the same signal (if Bolinger bands and
Stochastic are bullish, MACD should show a bullish crossover as well).

4. A “same time crossover” on all 3 indicators creates a higher probability of success and it is preferred
that most of the entries to be done under these circumstances.

It’s also wise that before triggering the entry you switch and look at the lower timeframes to try and pinpoint a
better entry price. Often times Price Action patterns on lower timeframes will give a chance for a better entry.

In the following example on USDCAD, a same time crossover signaled the start of a nice uptrend that yielded
almost pips with this strategy.
An example of a "same time" cross on all 3 indicators
Stop-Loss Placement:

1. The initial stop loss is placed behind the band with a deviation of 1 (inside Bolinger band). So, below
the band in an uptrend and above the band in a downtrend. The charts below will make this more clear.

2. It’s OK if price pierces the inside band but doesn’t close past it.
3. The trade is closed only when price closes outside of the bands.

Note that some trading platforms don’t have a native option for a stop on a close, so an Expert Advisor
might be useful in some cases.

In this USDJPY example, the Stochastic and the MACD started to turn before the price closed outside of the
band. This is a common occurrence and helps to confirm that the trend is near exhaustion.
An example of a short entry and exit on USDJPY 4h chart
Managing the Opened Trade, Trailing the Stop-Loss:

1. There are no profit targets – only managing the stop-loss.

2. Maximum profits are captured by trailing the stop-loss behind the band.
3. When the price goes out of the bands the trend has ended and therefore the trade is closed.

4. Of course using profit targets based on higher timeframes is a wise thing to do as well.

5. We also exit if Stochastic and MACD both crossover even though price didn’t close outside bands. This
is a precautionary tactic to protect profits. One way to do this is to close a part of the position and let the
other one run if you believe that the trend will continue.

6. It’s not a big issue if the price trades outside of the two bands for a brief time. However, keep in mind
that it can also indicate overbought or oversold market conditions. Depending on the context in which it
appears it can be traded accordingly. 

For example, if it appears at a support or resistance level then it should be looked at carefully as a reversal is
much more likely. On the other hand, if there is no support, resistance or other obstacles then it can be false
and not much significant. The ongoing trend will probably continue.
Combining resistance with this strategy – EURUSD 4h chart