Tri-Star

DEFINITION of 'Tri-Star'

A type of candlestick pattern that signals a reversal in the current trend. This pattern is formed when three consecutive doji candlesticks appear at the end of a prolonged trend.

The chart below illustrates a bearish tri-star pattern at the top of the uptrend and is used to mark the beginning of a shift in momentum.

Tri-Star

BREAKING DOWN 'Tri-Star'

A single Doji candlestick is an infrequent occurrence that is used by traders to suggest market indecision. Having a series of three consecutive doji candles is extremely rare, but when it is discovered, the severe market indecision generally leads to a sharp reversal of the given trend. The "three stars" pattern can also be used to signal the reversal of downward momentum when the pattern is formed at the end of a prolonged downtrend.

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RELATED FAQS
  1. How effective is creating trade entries after spotting a Tri-Star pattern?

    Learn about the tri-star pattern and how to use corroborating reversal signals from other technical indicators to build effective ... Read Answer >>
  2. How are Tri-Star patterns interpreted by analysts and traders?

    Learn how analysts and traders interpret the tri-star pattern in bullish and bearish charts and why this reversal signal ... Read Answer >>
  3. How do I implement a forex strategy when spotting a Tri-Star Pattern?

    Learn about the tri-star pattern and how to use this reversal signal in conjunction with other technical indicators to create ... Read Answer >>
  4. How do I build a profitable strategy when spotting an Tri-Star pattern?

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  5. Are Doji patterns important when trading forex pairs?

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