Morning Star candlestick - How do you trade | Trading Analysis

 

Morning Star candlestick 

Hello traders,  welcome to tradersgrip . Today I will discuss  in detail about the Morning Star candlestick pattern. This is a highly reliable Reversal bullish candlesticks pattern. It means now the bearishness in the market is over and the uptrend is about to begin.

Technical Analysis of Morning Star  candlestick  

Formation of morning star

* The Morning Star candlesticks pattern consists of three candles. The first candle is  Long Bearish or Marubozu  . It is of red colour.

* Body of  second candle is  very small  bullish  or bearish candlestick . It is of green or red colour.

* The third  candle is  Long bullish  or Marubozu candlestick . It is of green colour.

*  Body of second candle lies below the close price of first candle .

 * Third candle open  gapped up from body of second candle and it closes between mid price and open price of  first candle.

* The high of the first candle is  high of this pattern. And low of second candle is called low of  this pattern.

Where is it formed ?

* It is always formed after a long downtrend  in the chart. It is formed at the Bottom of the chart. After the formation of this pattern, the possibility of bearishness in the market ends. Buying after getting the confirmation will definitely be beneficial.

* It forms  in every type of market  such as Indian stock market, commodity market, foreign market etc.

* It appears in intraday charts, daily charts, weekly charts and monthly charts. In daily  charts  it works very well.

Where to use Morning star candle ?

* If you are trading in intraday then watch it in 5 minute ,15 minute and hourly time frame. But it gives good result in hourly time period.

* If you do positional trading then see it in daily chart and monthly chart.

Correct entry point for a morning star formation?

How to buy in morning star candle

* Buy only if the new candle crosses  the high of this pattern. This is very necessary.

volume in morning star

* Volume of second candle must be higher than that of first candle. And volume of third candle must be higher than second candle.  It indicate that signal is more powerful.

* The stop-loss is to be placed below the low price of this pattern.

Let us understand Morning star candle in the chart.

Morning star in chart

* The Morning Star pattern in this chart is formed after a long downtrend and the volume of the candles  is more than that of the previous candle of this pattern.

* Buy when the new candle crosses the high of this pattern.

* Put a stop-loss at the bottom of this pattern.

When to book profit?

* Until a trend changing signal is received.

important Point

*  In Morning Star Pattern second candle lies below the close price of first candle .

 * Third candle open  gapped up from second candle and it closes between mid price and open price of  first candle.

* After the formation of this pattern, one should not buy until the market price crosses its high.

* Volume of second candle must be higher than that of first candle.