How to grasp the trend starting point of the 4-hour moving average golden cross + 1-hour K-line continuous positive line?

The 4-hour golden cross (50 EMA > 200 EMA) combined with 3+ bullish candles on the 1-hour chart signals strong upward momentum, ideal for long entries with volume confirmation.

Jul 26, 2025 at 02:50 am

Understanding the 4-Hour Moving Average Golden Cross

The 4-hour moving average golden cross is a technical indicator that occurs when a short-term moving average crosses above a long-term moving average on the 4-hour chart. Typically, traders use the 50-period and 200-period exponential moving averages (EMA) for this signal. When the 50 EMA crosses above the 200 EMA, it suggests a shift from a bearish to a bullish trend. This crossover is considered a strong bullish signal in the cryptocurrency market due to its ability to filter out short-term noise.

To identify this crossover accurately, open your preferred trading platform such as TradingView or Binance. Navigate to the 4-hour chart of the cryptocurrency pair you are analyzing, for example, BTC/USDT. Apply the 50 EMA and 200 EMA indicators from the platform’s indicator library. Wait for the moment when the 50 EMA line turns upward and intersects the 200 EMA from below. This visual intersection marks the golden cross. It is essential to confirm this crossover with volume analysis—ideally, increasing trading volume supports the validity of the signal.

Avoid acting on the crossover immediately after it forms. Wait for confirmation candles to close above the moving averages. This reduces false signals, especially in volatile crypto markets where whipsaws are common. The golden cross works best when combined with other indicators or price action patterns, such as support levels or breakout formations.

Interpreting 1-Hour K-Line Continuous Positive Candles

After identifying the 4-hour golden cross, the next step is to analyze the 1-hour K-line chart for continuous positive (green) candles. This pattern indicates sustained buying pressure and reinforces the bullish signal from the higher timeframe. A sequence of three or more consecutive green candles on the 1-hour chart suggests strong momentum and market confidence.

To analyze this effectively, switch to the 1-hour timeframe of the same cryptocurrency pair. Look for a series of green candles where each candle closes higher than the previous one. Pay attention to the body size of the candles—larger green bodies indicate stronger buying interest. Small wicks at the top suggest limited resistance, while minimal lower wicks show that sellers are not pushing the price down significantly.

It is crucial to ensure that these green candles are forming after the 4-hour golden cross, not before. Premature bullish candles may reflect short-term rallies that lack sustainability. Also, check whether the price is trading above both the 50 EMA and 200 EMA on the 1-hour chart. This alignment confirms that the short-term trend is in sync with the longer-term bullish signal.

Combining Both Signals for Entry Confirmation

The real power of this strategy lies in the convergence of signals across timeframes. A golden cross on the 4-hour chart sets the macro trend, while continuous green candles on the 1-hour chart confirm short-term momentum. When both conditions are met, the probability of a sustained upward move increases.

• Ensure the 50 EMA has clearly crossed above the 200 EMA on the 4-hour chart.
• Verify that at least three consecutive green candles appear on the 1-hour chart after the crossover.
• Confirm that the current price is above both moving averages on the 1-hour timeframe.
• Check for rising trading volume during the green candle formation to validate buyer interest.

Once these conditions are satisfied, consider entering a long position. Use a limit order slightly above the high of the latest green candle to avoid missing the move due to slippage. Alternatively, enter with a market order if the momentum is extremely strong and you want immediate exposure.

Setting Stop-Loss and Take-Profit Levels

Risk management is critical when trading based on technical signals. Even strong setups can fail, especially in highly volatile cryptocurrency markets. To protect your capital, always set a stop-loss order.

• Place the stop-loss below the lowest low of the recent green candle sequence on the 1-hour chart.
• Alternatively, set it below the 200 EMA on the 1-hour chart, as a break below this level may invalidate the bullish structure.
• For take-profit, consider a risk-reward ratio of at least 1:2. For example, if your stop-loss is 2% away, aim for a 4% profit target.
• You may also use Fibonacci extension levels or recent resistance zones as profit targets.

Traders can choose to take partial profits at the first target and let the remainder ride if the trend continues. Avoid moving the stop-loss too aggressively unless there is a clear technical reason, such as a bearish engulfing pattern or a break of key support.

Backtesting the Strategy on Historical Data

Before applying this strategy in live trading, backtest it on historical price data to evaluate its effectiveness. Choose a cryptocurrency with sufficient historical 4-hour and 1-hour data, such as Bitcoin or Ethereum.

• Use TradingView’s bar replay mode to simulate real-time trading.
• Identify past instances where the 4-hour golden cross occurred.
• Check if three or more green candles followed on the 1-hour chart.
• Record the outcome: Did the price rise at least 5% after entry?
• Note false signals—entries that resulted in stop-loss triggers.

Repeat this process across multiple market cycles, including bull, bear, and sideways phases. This helps determine whether the strategy performs better in certain market conditions. Adjust parameters if necessary, such as using the 100 EMA instead of 200 EMA for faster signals, but be cautious of increased noise.

Frequently Asked Questions

What if the 1-hour chart shows green candles before the 4-hour golden cross?

Green candles appearing before the golden cross are not valid for this strategy. The 4-hour signal must come first to establish the trend direction. Early green candles may reflect short-term rebounds within a downtrend and carry higher risk.

Can I use simple moving averages (SMA) instead of exponential moving averages (EMA)?

Yes, but EMA reacts faster to price changes and is generally preferred for this strategy. SMA may delay the crossover signal, causing you to enter the trend later or miss it entirely.

How long should I hold the position after entry?

Hold until your take-profit is hit or a reversal pattern appears on the 1-hour chart, such as a doji, bearish engulfing, or a close below the 50 EMA. Do not hold indefinitely based on this signal alone.

Does this strategy work on altcoins?

It can work, but major cryptocurrencies like BTC and ETH provide more reliable signals due to higher liquidity and less manipulation. Altcoins may generate false crossovers due to pump-and-dump schemes.