📘 Trading from Scratch – Day 20/90
📊 Case study: How to analyze a Morning Star and an Evening Star step by step
In the previous days we learned what the Star Pattern is, how to confirm it, and what the most common mistakes are when using it. Now we’ll see a practical example to understand how many traders analyze this pattern within a trading plan.
Remember: this example is for educational purposes and does not represent an investment recommendation.
🟢 Bullish Scenario: Morning Star
Situation
Imagine the price has been moving down for several candles and reaches a support zone that previously acted as a bounce point.
At that level, a Morning Star appears.
Step 1: Analyze the context
✔ There is a prior bearish trend.
✔ The pattern appears near a support.
✔ No decision is made yet.
Step 2: Wait for confirmation
The next candle closes above the third candle’s high of the pattern.
Some traders interpret this confirmation as a sign that buying pressure may be increasing.
Step 3: Plan the trade
📍 Possible entry: after confirmation.
🛑 Stop Loss: below the pattern’s low.
🎯 Take Profit: at the next resistance level or using an appropriate Risk/Reward ratio.
🔴 Bearish Scenario: Evening Star
Situation
The price has been rising for several consecutive candles and reaches a resistance zone.
In that area, an Evening Star appears.
Step 1: Analyze the context
✔ Prior bullish trend.
✔ Pattern near a resistance
✔ Don’t open the trade immediately.
Step 2: Wait for confirmation
The next candle breaks the pattern’s low and maintains selling pressure.
Some traders consider this confirmation a possible sign of buying weakness.
Step 3: Plan the trade
📍 Possible entry: after confirmation.
🛑 Stop Loss: above the pattern’s maximum.
🎯 Take Profit: at the next support level or using a favorable Risk/Reward ratio.
Comparison of both scenarios
Aspect
🟢 Morning Star
🔴 Evening Star
Previous trend
Bearish
Bullish
Important zone
Support
Resistance
Confirmation
Bullish candle
Bearish candle
Possible Stop Loss
Below the pattern
Over the pattern
Target
Resistance
Support
Mistakes that can be avoided
❌ Enter before confirmation.
❌ Trade without a plan.
❌ Ignore support and resistance.
❌ Don’t set a Stop Loss.
❌ Trade impulsively.
Best practices
✅ Analyze the context first.
✅ Wait for confirmation.
✅ Define the risk before opening a trade.
✅ Follow your trading plan.
✅ Keep a log of your trades to learn from every experience.
Conclusion
A candlestick pattern can provide useful information, but its interpretation improves when analyzed together with the trend, relevant zones, and proper risk management.
Discipline and patience are as important as correctly identifying the pattern.
📘 On Day 21/90, we’ll start a new candlestick pattern: Harami, learning how to identify its bullish and bearish versions.
💬 Question:
🤔 When you analyze a candlestick pattern, what do you check first: the trend, support or resistance, or do you wait for the confirmation candle before thinking about a trade?
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