Key Takeaways
Morning Star
A three-candle reversal pattern consisting of a long bearish candle, a small-bodied candle (gap down), and a long bullish candle closing into the first candle.
Market Psychology
Selling pressure exhausts, indecision occurs, then buyers take full control, signaling a major shift in sentiment.
Candle Structure
Trading Setup Example
Entry, stop loss, and take profit levels.
Always wait for pattern confirmation before entering a trade.
Where This Pattern Appears
Trend context and market position.
Appears at the bottom of a downtrend, signals bullish reversal.
How to Identify
First candle: Long bearish candle in a downtrend
Second candle: Small body that gaps below first candle (star)
Third candle: Long bullish candle closing above midpoint of first candle
Gaps are ideal but not mandatory in forex
Confirmation Signals
Trading Strategy
š„ Entry
Enter long at close of third candle or on next candle confirmation
š Stop Loss
Place stop below the star (middle candle) low
šÆ Take Profit
Target previous swing highs or 1:2 risk-reward
āļø Risk/Reward
1:2.5
Common Mistakes to Avoid
Pro Tips
Best Timeframes
Pattern Variations
Educational Disclaimer
This content is for educational purposes only and does not constitute financial or investment advice. Trading involves significant risk and you may lose your capital. Always consult a licensed financial advisor before making investment decisions.
Frequently Asked Questions
Related Learning Resources
Related Patterns
Hammer
A single candlestick pattern with a small body at the top and a long lower shadow (at least 2x the body). Appears at the bottom of a downtrend.
Inverted Hammer
A single candlestick with a small body at the bottom and a long upper shadow. Appears at the bottom of a downtrend, signaling potential reversal.
Bullish Engulfing
A two-candle reversal pattern where a large bullish candle completely engulfs the previous bearish candle. One of the most reliable reversal patterns.