Indicators: Moving Averages, multi-timeframe - page 2
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Death Cross pattern (based on How to Trade the Death Cross on Oil article)
What is the ‘Death Cross’ pattern?
Though its sounds scary and ominous, the ‘Death Cross’ (DC) pattern is neither. In fact, consumers that are tired of paying $80 or more to fill up their gas tank will rejoice at what this pattern means to the price of oil. The DC occurs when the short-term 50-day simple moving average crosses below the 200-day simple moving average. Typically, in a moving average crossover, a shorter term moving average crosses below a longer term moving average a sell signal is generated and price is expected to move lower. What makes the DC different is that the 200-day SMA is watched by so many traders to determine long term bullishness or bearishness that when the 50-day crosses below the 200, the selling can be substantial as institutional and retail selling converge.
The Death Cross (and its counterpart, the Golden Cross) typically use the 50-day and 200-day moving averages. Technically, though, it's any short MA crossing a long MA. Personally, I've found that using the 20-day and 100-day, plus a filter to make sure it crosses strongly and isn't just riding along sideways, seems to work better. Of course, with MT5, you can optimize it to whatever short and long values you want — just beware of overfitting, of course.