What Is The Morning Star Candlestick Pattern And How To Use It

Morning Star Candlestick Pattern – Technical analysis’s bullish signal for the Morning star pattern is a three-candlestick formation. 

This specific candlestick pattern invariably appears after a protracted stretch of downward market movement.

In the context of stock analysis, a specific candle pattern appears when buyers try to take back control of the price of a stock that is in a downtrend. 

A lengthy red candle first appears, indicating that the bearish sentiment is still present. 

Next, a shorter red candle with long wicks and a thin body replaces this previous one.

After that, the Morning star candlestick pattern is complete and a sizable green candle appears. 

The “Morning star” pattern as a whole is a reliable predictor of a potential shift in the market’s sentiment in favor of bullishness.

Morning Star Candlestick Pattern
Image Credit – www.ig.com


This signals a shift in the prevailing trend. The morning star pattern is clearly observable in the provided image.

How To Trade The Morning Star Candlestick Pattern

The Morning Star candlestick pattern is a reliable indicator of a potential trend reversal in the market. 

This pattern suggests that the current trend is coming to an end and that buyers are exerting more power over the market.

When considering a trade based on the Morning Star candlestick pattern, it is best to close the trade on the candle that lights up right after the pattern forms. 

To do this successfully, you can place a buy trade at the highest point of the third candle within the Morning Star candlestick pattern.

Additionally, using the Relative Strength Index (RSI) indicator in your analysis can be helpful for additional confirmation of the trend reversal.

What is The Difference Between Morning Star and Doji

At first glance, the Morning Star candlestick pattern appears to be similar to the Doji pattern. 

The way they look, however, is a key point of distinction. 

The Morning Star candlestick pattern is distinguished by its extended wicks, while the Doji pattern is characterized by a cross-like symbol (+) instead.

Interpretation-wise, the Doji pattern reflects market uncertainty, frequently hinting at possible trader hesitancy. 

As a confirmation of the current trend, the Morning Star candlestick pattern, on the other hand, denotes a more definite shift in market sentiment.

Limitations of Morning Star Candlestick Pattern

The Morning Star candlestick pattern is a notable indicator of a potential trend reversal in the market. 

To avoid taking unnecessary risks, it’s advised to use caution when making trading decisions solely based on this pattern.

It is advised to supplement your analysis with tools like the Relative Strength Index (RSI) and Bollinger Bands in order to increase the reliability of the Morning Star candlestick pattern. 

These indicators may increase your confidence in your ability to forecast an upward market movement.

The Morning Star candlestick pattern’s longer-term implications suggest that it might not be a good choice for intraday trading. 

Longer-term trading strategies typically perform better when using this pattern. 

As a result, it is advised to use a 1-day time frame when trading with the Morning Star candlestick pattern.



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