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Day Trading/Death Cross

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Question
Hello:

When the 50-day moving average crosses the 200-day moving average, this crossing is know as a "death cross."

Sometimes this cross does not always indicate a long term downward trend.  What can be used with these averages to help indicate that the price will indeed be long term?

I thank you for your reply.

Answer
Hi Kenneth,

There are no "perfect" indicators or combination that will guarantee that you won't get a "false" signal. However, one way to help identify stronger moves is to use a combination of indicators to base your decisions.

As an example, I personally use MACD to identify the trend, Bollinger Bands to identify opportunities and signals, and RSI to confirm the move. This combination works well for me because MACD alone doesn't provide the best signals, but the combination in my opinion is pretty powerful.

Here is a link to discuss this more...

http://www.rockwelltrading.com/tools/

There are 2 videos under Rockwell Trading Resources.

Day Trading

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Mark Hodge

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Questions related to technical analysis, strategies, risk, trading plans, trading psychology and money management. Experience in trading all markets and time-frames with expertise in futures (e-minis, currencies, commodities) and equity options. Unfortunately I am not allowed to offer any specific trading advice (i.e. should I go long the E-mini S&P today).

Experience

I have been involved in the industry since 1995 working for Morgan Stanley Dean Witter and American Express Financial Advisors before becoming a full time trader. As Head Education Coach with Rockwell Trading I have coached hundreds of students around the world to achieve their trading goals with simple strategies, a sound trading plan and proper money management for the leveraged markets.

Organizations
Currently serving as Rockwell Trading's Head Education Coach www.rockwelltrading.com and moderator for Rockwell's Student Trading Room where we follow opportunities in the minis, interest rates, currency and grain markets daily.

Publications
Technical Analysis of Stocks & Commodities, "Day Trading With Volatility", June 2010 SFO Magazine, "Home on the Range: Lasso Trades Without Time", August 2010 SFO Magazine, "Day Trading Indicators, Part 1", January 2011 SFO Magazine, "Day Trading Indicators, Part 2", February 2011 SFO Magazine, "Technical Strategy", April 2011 SFO Magazine, "Advanced Trading Techniques - Futures Spread Trading", October 2011 Active Trader, "A Simple Day-Trading Strategy", November 2011 Marketplace Books, How to Trade Commodities: Simple Strategies for Gold and Crude That Traders Can Use in Any Market, June 2011

Education/Credentials
Formerly licensed as a financial advisor with Series 6, 7, and 63 licenses. B.A. in Organizational Communications with a Business Minor from California State University, Sacramento.

Past/Present Clients
I have worked with institutional traders, brokers, proprietary trading firms and private traders.
One of the few distinguished World Cup Advisors www.worldcupadvisors.com

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