Morning star


    The morning star is a reversal pattern, usually formed at the end of a downtrend.

    In order to be valid:

    • The first candle (1) has to be a bearish candle which is still part of the recent downtrend.
    • The second candle (2) must have a very small body, indicating some indecision in the market. It can be either bearish or bullish.
    • The third candle (3) gives you the confirmation of a reversal, as it closes beyond the middle of the first candle.
    Further reading

    Read more about trading using Japanese candlesticks: