With more and more people participating in stock trading, it is becoming more and more important to understand the stock market. One of the important concepts is the dead fork of the golden fork, which is a phenomenon of the crossing of moving averages, and the crossing of moving averages is one of the focuses of technical analysis. This paper will analyze the dead fork of the golden fork from many angles and give ten formulas to help readers better understand this concept.

1. What are a golden fork and a dead fork?

Golden fork is what happens when the short-term moving average of stock price crosses the long-term moving average. On the contrary, the dead fork refers to the situation that the short-term moving average of the stock price crosses the long-term moving average. When the golden fork happens, it usually means that the stock market will enter an upward trend. When a dead fork happens, it usually means that the stock market will enter a downward trend.

2. What is a moving average?

Moving average is a graphic analysis tool to observe the trend of stock price. The moving average is calculated according to the average closing price in a specific time period. Commonly used moving averages are 5-day moving average, 10 moving average and 20-day moving average.

3. What is the function of the moving average?

The role of EMA is to simplify the impact of stock price fluctuations and reveal more obvious trends. Smooth EMA allows traders to identify the price behavior of currency pairs more accurately, making it easier for them to observe the distribution of their average values.

4. What is the function of the crossing of moving averages?

The function of moving average crossing is to show the possibility of market trend change. Simply put, when the short-term moving average of the stock price crosses the long-term moving average from below, it indicates that the stock market is about to enter an upward trend. On the contrary, when the short-term moving average of the stock price crosses the long-term moving average from above, it indicates that the stock market is about to enter a downward trend.

5. Why do you want to cross the moving average?

The crossing of moving averages can not only predict the change of stock market trend, but also provide investors with trading opportunities with great probability. This technology helps to determine the trend of the market, thus helping investors to better decide when to buy and sell stocks.

6. How to analyze the dead fork of the golden fork?

The analysis of the dead fork of the golden fork can be carried out by observing the time when they occur and the angle of the moving average. Usually, the golden fork occurs when the stock price reaches a low point and begins to climb upwards, and the dead fork occurs when the stock price reaches a high point and begins to decline. In addition, the greater the angle difference, the greater the possibility of market trend change.

7. How reliable is the golden fork?

Although the golden fork is a useful technical analysis tool, it is not always a reliable indicator to predict market trends. Traders should cooperate with other technical analysis tools and fundamental analysis to guide decisions.

8. What are the application scenarios of EMA crossing?

The crossing of moving averages can be applied to various types of stock, futures and currency trading markets. For long-term traders, the 20-day moving average and the 50-day moving average may be more suitable choices. For mid-term traders, the 10 moving average and the 20-day moving average are more suitable. For short-term traders, the 5-day moving average and 10 moving average are more applicable.

9. How to trade across the moving average?

If the moving average crosses, it shows the appearance of the golden cross, which means that the market may be a good buying opportunity. On the contrary, if the dead fork appears, it may be a good time to sell. Traders should wait for the stock price to rebound from the golden fork or the dead fork and take corresponding actions.

10. How to avoid misjudgment of average crossing in practice?

The crossing of moving averages sometimes leads to misjudgment, and traders should cooperate with other technical analysis tools and fundamental analysis to guide decision-making. In addition, traders should always formulate appropriate stop-loss strategies to reduce risks.