Candlestick Pattern: Morning Star
Star or star pattern is a trend reversal pattern (reversal) consisting of three candles, with a candle that is forming a star. Star is a candle with a short real body, like a doji or spinning top, which is detached from the real body candle before. There are three basic star patterns: the morning star, which appears in the descending trend; evening star and shooting star, which appear in the uptrend.
The pattern of morning star is a bullish pattern, reversal pattern reversal opposite the evening star. This indicates a weakening in the downtrend that could potentially cause a trend reversal. Like an evening star, the morning star consists of three candles with a candlestick in the center forming a star.
The first candlestick in the morning star pattern must be a dark candlestick (bearish) with a large body that is relatively large. The second candlestick is a star, which has a short real body separate from the first real body candle. The gap or the distance between the real body of the two candles distinguishes the star from the doji or spinning top. Star does not need to form below the first low candle level and can exist between the shadow below the first candle. The appearance of the star is the first indication of the trend’s weakening. This indicates that the sellers are not able to make the price close lower than the closing of the previous period. This weakness is confirmed by the third candlestick, which must be its light candlestick body and should be sealed well into the first candlestick body.
Like the evening star, the reliability of the morning star will increase if the third candlestick opens above the real body candle of the star (the middle or second candle) thus leaving a trace gap between the real body of the star and the third candlestick. Although, this is very rare. The higher the reliability with a further look at the real body of the third candlestick penetrate the first real candlestick body, especially if the third candlestick has little or no upper shadow. Reliability also increases if the volume at the first candlestick is below average and the volume on the third candlestick is above average.