Morning Star
Candlestick PatternsA three-candle bullish reversal pattern consisting of a large red candle, a small-bodied candle (often a doji), and a large green candle. It signals the end of a downtrend.
What Is a Morning Star?
The morning star is a three-candle bullish reversal pattern that appears at the bottom of a Downtrend. The first candle is a strong red (bearish) candle confirming the existing downtrend. The second candle has a small body (it can be green or red, or even a Doji) and ideally gaps below the first candle's close. The third candle is a strong green (bullish) candle that closes well into the body of the first candle.
Why It Works
The pattern captures a shift in sentiment across three sessions. The first candle shows sellers in control. The second candle shows indecision as selling momentum fades. The third candle confirms buyers have taken over.
On EUR/USD daily charts, a morning star forming at a major Support level is one of the most reliable reversal setups. Traders enter long at the third candle's close with a stop below the second candle's low.
Tips for Reliability
The deeper the third candle closes into the first candle's body, the stronger the reversal. Ideally, it should close above the midpoint of the first candle. Gaps between candles (common in stocks, rarer in forex) add to the pattern's strength but are not strictly required in the 24-hour forex market.
Related Terms
Evening Star
A three-candle bearish reversal pattern consisting of a large green candle, a small-bodied candle, and a large red candle. It signals the end of an uptrend.
Bullish Engulfing
A two-candle bullish reversal pattern where a large green candle completely engulfs the body of the preceding red candle. It signals strong buying momentum after a decline.
Piercing Pattern
A two-candle bullish reversal pattern where a green candle opens below the prior red candle's low and closes above its midpoint. It signals buying strength emerging in a downtrend.
Three White Soldiers
Three consecutive long green candles with progressively higher closes, each opening within the prior candle's body. It signals a strong bullish reversal or continuation.