either a doji or a spinning top.
opens with a gap
he morning star is a bullish candlestick pattern which evolves over a three day period.
indicates buyer’s enthusiasm.
Unlike the single and two candlestick patterns, both the risk taker and the risk-averse trader can initiate the trade on P3 itself.
gap up opening
Unlike the single and two candlestick patterns, both the risk taker and the risk-averse trader can initiate the trade on P3 itself. Waiting for a confirmation on the 4th day may not be necessary while trading based on a morning star pattern.
The lowest low in the pattern would act as a stop loss for the trade
The morning star is a bullish candlestick pattern which evolves over a three day period. It is a downtrend reversal pattern. The pattern is formed by combining 3 consecutive candlesticks. The morning star appears at the bottom end of a downtrend. In the chart below the morning, the star is encircled.
The evening star is a bearish equivalent of the morning star. The evening star appears at the top end of an uptrend. Like the morning star, the evening star is a three candle formation and evolves over three trading sessions.
As a rule of thumb, the higher the number of days involved in a pattern, the better it is to initiate the trade on the same day. The stoploss for a long trade is the lowest low of the pattern. The stoploss for a short trade is the highest high of the pattern.
long red candle
the bears show dominance with a gap down opening.
Note the presence of doji/spinning top represents indecision in the market.
a doji/spinning sets in a bit of restlessness within the bears
that manages to close above P1’s red candle opening.
P3 is where all the action unfolds
look at buying opportunities in the market.
P1 should be a blue candle
Glasp is a social web highlighter that people can highlight and organize quotes and thoughts from the web, and access other like-minded people’s learning.