Morningstar Pattern


The opposite pattern of the morning star pattern is the evening star pattern. This is a simple study designed to track multiple candlestick patterns. A morning star develops in a downward trend and marks the beginning of an upward rise. It indicates a reversal in the earlier price trend. Traders look for the emergence of a morning star before using further indications to verify the occurrence of a reversal. So, with this in mind, let us look at the step by step process of identifying the morning star candlestick.

star patterns

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The first candle shows that a downtrend was occurring and the bears were in control. However, after a tug-of-war and a period of uncertainty, the bulls successfully took over. You can expect increased stock prices to follow.

The Morning Star and Evening Star patterns are also relatively easy to spot and can be quite useful in identifying trend reversals. When you spot the pattern at a support level, you can use momentum oscillators like stochastic or RSI to confirm the reversal signal. An RSI rising from an oversold region following the formation of a Morning Star pattern around a support level confirms the bullish reversal signal. You can combine the Morning Star pattern with other technical analysis tools and indicators. action traders use it as a signal to spot a buying opportunity in the market. An integral component of a technical trader’s toolkit is the morning star and evening star patterns. Morning and evening star forex patterns are very similar to each other. So my advice to you would be to know the patterns that we have discussed here. They are some of the most frequent and profitable patterns to trade on the Indian markets. As you progress, start developing trades based on the thought process behind the bulls’ actions and the bears.

Also, you could look at the overall volume to see whether it matches with the new trend. The importance of the morning star happens when the fourth candle opens above the body of the star candle. Spot an evening star with a doji instead of a spinning top in the middle? You’ve got a doji evening star, an even stronger signal of impending selling action. As for profit targets, a previous area of resistance or consolidation is generally a solid point to aim for. Make sure you pay attention to your risk/reward ratio here.

The candlestick pattern is the opposite of the Evening Star, which is a top reversal signal that indicates bad things are on the horizon. Also, Day 3 broke above the downward trendline that had served as resistance for MDY for the past week and a half. Both the trendline break and the classic Morning Star pattern could have given traders a potential signal to go long and buy the Midcap 400 exchange traded fund. This technical analysis guide covers the Morning Star Candlestick chart indicator. The pattern is split into three separate candles with relationships between all of them.

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This is where Doji candles can be seen as the market opens and closes at the same level or very close to the same level. The indecision makes way for a bullish move because the bulls see value at this level and prevent any more selling. When the bullish candle appears after the Doji, then there will be a bullish confirmation. In a sideways market, the Morning Star pattern can be used to trade the price reversal from the support end of the price range.

When found in a downtrend, this pattern can be an indication that a reversal in the price trend is going to take place. What the pattern represents from a supply and demand point of view is a lot of selling in the period of the first black candle. Then, a period of lower trading with a reduced range, which indicates indecision in the market, forms the second candle. This is followed by a large white candle, which represents buyers taking control of the market.


Make sure the pattern is forming at the end of a downtrend or at the end of a consolidation period before trading it. The common consensus is that morning star patterns are a fair indication of market movement. They are also a helpful early candlestick pattern for technical traders just starting out because they are relatively easy to recognize.

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The morning star pattern is very simple to identify on the price chart if you are an intermediate trader. Even beginners can spot it easily on the chart with little practice. The pattern gives us well-defined entries and good risk-reward ratios. Despite this, it is advisable to combine this pattern with some other trading tools to increase reliability.


There are many seasonal tendencies in the markets that you can use to improve your trading strategies. For example, you will find that a lot of markets have some days that are more bullish or bearish than others. Each of the three candlesticks in the Three Black Crows pattern should be relatively long bearish candlesticks with little or no lower shadows. Each of these candlesticks mark a steady decline in the …

From a morning star pattern, traders should look to open long positions. The Morning Star is a bullish reversal pattern represented by three candles. During a downtrend, the first candle is long and decreases.

Psychology of Morning Star Candlestick Pattern

The chart above has been rendered in black and white, but red and green have become more common visualizations for candlesticks. The important thing to note about the morning star is that the middle candle can be black or white as the buyers and sellers start to balance out over the session. While both patterns can be useful in identifying potential reversals, it’s important to remember that they should not be used as the sole basis for trading decisions. Instead, they should be used in conjunction with other technical indicators to confirm the strength of the reversal signal. However, morning stars can also occur amid a downtrend, making them difficult to interpret.

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  • Traders observe the formation of a morning star pattern on the price chart.
  • On day 1 of the pattern , as expected, the market makes a new low and forms a long red candle.
  • Morning Star is a bullish trend reversal candlestick pattern consisting of three candles.
  • Since the doji candles of both days could easily be combined into one candlestick without any loss of information, the above chart is easily considered a morning doji star pattern.

Traditionally, a market is considered volatile when the ADX goes above 20 when used together with the standard length, which is 14. As such, buying pressure increases and makes it harder for bears to continue pushing prices lower. The market closes around where it opened, creating a Doji-like candle. When the market comes from the bearish trend, most market participants believe that it’s going to continue down.

Clients must consider all relevant risk factors, including their own personal financial situation, before trading. Trading foreign exchange on margin carries a high level of risk, as well as its own unique risk factors. Morning Star is a bullish trend reversal candlestick pattern consisting of three candles. So now we have to build the quarter of the block. And this star generally has a Y seam involved but we’ve made it so it doesn’t So then you’re going to take some background fabric, your black fabric. I mean you’re going to have to cut one or have four six inch blocks for each strip.

If the bullish move looks like it is continuing, then it might be time to trade. The typical method to trade a morning star is to open a buy position once you have confirmed that a bull run is actually underway. If you don’t confirm the move before trading, then there’s a chance the pattern could fail. If such a pattern appears and all other checklist items comply i.e volume, S&R, Risk Reward Ratio etc…I would go ahead and trade this confidently on the merits of an evening star. Morning star is a bullish pattern which occurs at the bottom end of the trend.

The Morning Star and Morning Doji Star are three day bottom reversal patterns. Just as the morning on earth predicts that the sun will rise, the morning star candlestick pattern suggests that prices will rise. The first day of the morning star pattern consists of a long bearish candlestick after a previous downtrend. The second day candlestick gaps down, therefore the candlestick opens at a lower price than the first day’s closing price.

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How to Trade a Morning Star?

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