A Golden Cross is a bullish technical analysis pattern that appears when a short-term moving average crosses above a long-term moving average. Traders view this crossover as a signal that market momentum may be shifting upward.

The pattern typically develops in three phases:

1. The market is in a downtrend, with the short-term MA positioned below the long-term MA.

2. A reversal begins, and the short-term MA crosses above the long-term MA.

3. An uptrend continues, with the short-term MA remaining above the long-term MA.

The most common moving average pair used is the 50-day MA crossing above the 200-day MA, though traders may also apply other combinations depending on strategy or timeframe. Both SMA (Simple Moving Average) and EMA (Exponential Moving Average) pairs can form a valid Golden Cross.

Some traders also look for increased trading volume at the crossover to confirm the signal. After the Golden Cross, the long-term MA often acts as a support level, and some traders wait for a retest of this area before entering a position.

Golden Cross patterns on higher timeframes, such as the daily chart, tend to be more reliable than those on lower timeframes. Still, false signals can occur if the price quickly reverses after the crossover, which is why risk management remains essential.

The opposite pattern is the Death Cross, where a short-term MA crosses below a long-term MA, signaling potential bearish momentum.