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The Golden Cross and Death Cross are highly favored strategies in trend-following trading systems. You may have encountered these terms if you’ve enrolled in a technical analysis course or tutorial. Even if you haven’t, we’re here to explain these concepts and their practical application. In this post, we also provide an Excel sheet that allows you to backtest them on any stock or index. Please continue reading below.

Explore more of our Excel-based trading strategies here.

What is Golden Cross and Death Cross?

The Golden Cross and Death Cross are significant points in a stock or index’s technical chart, indicating trend reversals. They are based on moving average crossovers. The general rule is that a stock gives a Buy signal when the faster-moving average crosses above the slower-moving average, while it gives a Sell signal when the faster-moving average crosses below the slower-moving average. The Golden Cross occurs when the 50-day simple moving average crosses above the 200-day moving average, and the Death Cross occurs when the 50-day moving average crosses below the 200-day moving average. Either crossover carries more weight when accompanied by high trading volume. It’s as straightforward as that! This strategy works effectively on a majority of indices and stocks over the long term.

Strategy Overview

Parameter Value
Preferred Timeframe Daily
Indicators Used 50 Days SMA, 200 Days SMA
Buy Condition 50 Days SMA is above 200 Days SMA
Short Condition 50 Days SMA is below 200 Days SMA
Stop Loss No fixed stop loss; stop and reverse when Excel gives the opposite signal
Targets No fixed target; stop and reverse when Excel gives the opposite signal

Excel Sheet

Parameter Description
Worksheet Name Golden Cross and Death Cross
Inputs Stock Name (B4) Name of the Stock or Index. Example: NSE:NIFTY, NASDAQ:AAPL
Quantity (B5) Number of shares to Buy when Golden Cross or Death Cross occurs
Initial Capital (B6) Your initial trading capital
Number of Days (B7) Number of days to backtest this system
Outputs Final Capital (E4) Final capital after the backtest period
Profit Points (E5) Total points earned
Total Profit/Loss (E6) Total profit/loss in exact terms
Total Profit/Loss % (E7) Total profit/loss in percentage terms

Screenshot

Golden Cross and Death Cross

Step 1: Open the sheet from the provided link at the end of this post.

Step 2: Enter inputs in Cells B4 to B7. Ensure you are connected to the internet.

Step 3: Wait for approximately 30 seconds. The sheet will update automatically based on the inputs you provided.

Step 4: Check the outputs in Cells E4 to E7.

Step 5: Take Buy/Short positions based on the signals in the Position column.

Here is the link to the Google Sheets document where you can edit it online without the need to download it to your local machine.