A golden cross is comprised of just two indicators. The short-term, or lead SMA, is the 50-period and the longer-term, or laggard SMA, is the 200-period. You can use many variations when it comes to the moving averages as long as they are the 50-period and the 200-period.
Some traders may prefer exponential moving averages (EMA) as they can give an earlier signal since recent trade prices carry more weight than older prices.
The golden cross forms when the 50-period MA crosses up and through the 200-period MA. The golden crossover indicates that a breakout occurs when it turns into an uptrend as the 50-period MA rises and starts pulling up the 200-period MA, which also rises slower.
The distance between the 50-period SMA and the 200-period MA is the trading channel and initially gets wider as the stock continues to make higher highs and higher lows on the uptrend.
The channel tightens when the stock starts slowing down. This means the 50-period MA starts to flatten as the 200-period MA catches up. From here, either another leg of the uptrend forms as the 50-period MA rises again or the 50-period MA turns and crosses the 200-period MA down, forming a breakdown.