Morning star candlestick pattern

Morning star candlestick pattern  

What is a Morning Star Candle?  

The morning Star candle is a bullish reversal candlestick pattern, which is a combination of 3 candles 1st is a Red candle 2nd is a Doji or star candle red or green, and 3rd candle should be a green candle.   

When the market is in an uptrend, the evening Star candle is formed at the upper level near the resistance zone or supply zone, and from there signals a bearish reversal.  

Candlestick formation?  

Candle 1: Big red candle  

The first candle shows a large red candle, telling us sellers are in control. The market closes much lower than where it opened.  

Candle 2 : Star candle  

On the second candle, we see a small candle with a small real body candle. It can be either a red candle or a green candle. The color doesn't matter much here. This candle shows that sellers might be losing a downtrend.  

Candle 3: Green strong candle  

The third candle's final brings a strong green candle, closing at least halfway up the first day's red candle. This shows buyers are going up back into the market.  

Why morning star candlestick pattern matter?  

The morning star candle pattern is special because it shows us three important market moments which is given below.  

1. Strong selling pressure in the market.  

2. A pause in the downtrend in the market.  

3. Return of buying pressure in the market.  

How to Trade in the Morning Star candlestick pattern?  

What should be Entry Points for intraday trades?  

1. Wait for the third candle to complete.  

2. Look for the pattern near support levels.  

3. Check if trading volume increases on the third day.  

What should be a Stop Loss order?  

1. Place stoploss order below the low of the second doji candle.  

2. Keep your risk manageable (usually 1-2% of your account).  

3. Consider market volatility when placing a stop-loss order.  

Remember for better trading with Morning Star candlestick  

1. Combine with other technical indicators like volume and RSI.  

2. Look for patterns on multiple timeframes like 5,15Minutes.  

3. Watch trading volume for reversal confirmation  

We have to Avoid Common Mistakes  

1. Don't jump in too early for profits.  

2. Don't ignore the overall market trend, if fully negative with volume avoid for entry.  

3. Don't forget to set a proper stop-loss order.  

4. Don't trade the pattern in a sideways market.  

5. The morning star candlestick pattern isn't a guarantee, but it's a helpful tool when used as part of a complete intraday trading strategy.  

The key point for Pattern Reliability  

1. Works best in established downtrends market.  

2. More reliable when reach near support zone.  

3. Success rate high with higher trading volume.  

4. Better results on longer timeframes like 15-minute and 1-hour timeframes.  

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