YOU KNOW MORE ABOUT CANDLE PATTERNS.
♦️Morning Star Candle.
1.1. What is it?
The morning star is a three-candle pattern that indicates a bearish trend may be coming to an end and a new bullish trend is about to begin.
2. What trend does it belong to?
It belongs to a bullish reversal trend, meaning it appears at the end of a bearish trend and suggests a possible change in direction towards a bullish trend.
3. How does the pattern appear?
It is formed with three consecutive candles:
-First candle: a large bearish candle that reflects strong selling pressure.
-Second candle: a small candle (it can be bullish or bearish, even a doji), which creates a downward gap (opens lower than the previous close). It indicates indecision in the market.
-Third candle: a large bullish candle (green or white body), that closes above the midpoint of the first candle. It confirms the change in sentiment towards buyers.
4. How to identify it?
To recognize the morning star pattern, look for:
A clearly established prior bearish trend.
Three candles:
a) A large bearish body candle.
b) A small body (it can be a doji or spinning top), with a possible bearish gap.
c) A large bullish body that closes well within the body of the first candle.
"The volume in the third candle may increase, reinforcing the signal."
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