A morning star is a bullish candlestick pattern. It consists of three candles. It is a downtrend reversal pattern. A morning star is formed after a downward trend. Morning Star Candlestick Pattern
There are three types of Star.
- Morning Star
- Evening Star
- Shooting Star
Today we are going to discuss morning star.
Morning Star Candlestick Pattern
There should be a downtrend before the Morning Star pattern is formed. After that you will see a Bearish candle. The next candle will open the gap down. Who will have a small body.
A small body candle can be bearish or bullish. The next candle will be a bullish candle which will open the gap. In this way you can identify Morning Star.
Trade Setup – Morning Star Pattern
Once the Morning Star pattern appears on the chart, you should setup your trade. In this pattern you see three types of candles. One bearish, one bullish and one small body.
As soon as you get the breakout of the Bearish candle then you can make your position in the market. If we talk about stop loss, then you should place your stop loss below the low of the small body candle.
Example 1 – Morning Star
Here you have been told about the Morning Star Pattern with the help of chart. You can see that first you are seeing a down trend. After this you see a bearish candle. The next small body candle is the gap down open.
The next bullish candle is open gap up. You can place your position on the breakout of the Bearish candle. And you can put stop loss below the low of the small body candle.
Example 2 – Morning Star
When found in a downtrend, this pattern can be an indication that a reversal in the price trend is going to take place.
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