Morning Star


DEFINITION of 'Morning Star'

A bullish candlestick pattern that consists of three candles that have demonstrated the following characteristics:

1. The first bar is a large red candlestick located within a defined downtrend.
2. The second bar is a small-bodied candle (either red or white) that closes below the first red bar.
3. The last bar is a large white candle that opens above the middle candle and closes near the center of the first bar's body.

As shown by the chart, this pattern is used by traders as an early indication that the downtrend is about to reverse.

Morning Star

BREAKING DOWN 'Morning Star'

A morning star pattern can be useful in determining trend changes, particularly when used in conjunction with other technical indicators. Many traders also use price oscillators such as the MACD and RSI to confirm the reversal.

  1. Real Body

    In candlestick charting this is the wide part of a candle that ...
  2. Bar

    A graphical representation of a stock's movement that usually ...
  3. Bull

    An investor who thinks the market, a specific security or an ...
  4. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following ...
  5. Reversal

    A change in the direction of a price trend. On a price chart, ...
  6. Relative Strength Index - RSI

    Relative Strength Indicator (RSI) is a technical momentum indicator ...
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  1. How do I implement a forex strategy when spotting a Star Pattern?

    The three candlestick star patterns are commonly interpreted by traders and analysts as market reversal signals. Since all ... Read Full Answer >>
  2. How do I build a profitable strategy when spotting a Star pattern?

    The morning star and evening star candlestick patterns are interpreted by traders as market reversal signals. A profitable ... Read Full Answer >>
  3. How are Star patterns interpret by analysts and traders?

    Star candlestick patterns are relatively strong reversal signals. The morning star pattern occurs at the bottom of a downtrend ... Read Full Answer >>
  4. How effective is creating trade entries after spotting a Morning Star pattern?

    The morning star candlestick pattern is largely consistent in predicting a bullish reversal in a chart with a stable bearish ... Read Full Answer >>
  5. How do I build a profitable strategy when spotting a Morning Star pattern?

    Traders have a couple of options for designing a trading strategy that takes advantage of a morning star candlestick pattern, ... Read Full Answer >>
  6. How do I Implement a forex strategy when spotting a Morning Star pattern?

    A forex trader can implement a low-risk trading strategy designed to take advantage of a possible bullish market reversal ... Read Full Answer >>
  7. How are Morning Star patterns interpreted by analysts and traders?

    The morning star candlestick pattern can be an especially reliable indicator of trend reversal, though some signals are stronger ... Read Full Answer >>

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