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Glossary · Candlestick patterns

Morning star

A three-candle bullish reversal pattern: a long bearish candle, a small-bodied candle, then a strong bullish candle closing well into the first.

By Sky Trade editorial teamUpdated

The morning star appears after a decline and tells a story in three candles:

  • a long bearish candle, with sellers in control;
  • a small-bodied candle, sometimes a doji, as the selling stalls;
  • a strong bullish candle that closes at least halfway up the first candle's body.

In the classic definition the middle candle gaps below the first and the third gaps above the middle. On continuous forex charts those gaps rarely occur, so traders accept the pattern based on body sizes and how deep the third candle closes.

The pattern is more convincing when it forms at support after a meaningful fall, and when the third candle is large compared with recent ones. It is less convincing when the first candle is ordinary or when the whole thing forms inside a range.

A frequent error is acting on the first two candles in anticipation. Until the third candle closes there is no morning star — only a bearish candle and a pause, which are at least as likely to precede continuation. Its bearish counterpart is the evening star. See morning star and evening star.

Example

USD/CHF on M15: a bearish candle from 0.8850 to 0.8820, a doji near 0.8818, then a bullish candle from 0.8820 to 0.8842, closing well above the first body's midpoint of 0.8835.

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