What Is Morning Star?
The morning star is a three-candle bullish reversal pattern that signals the end of a downtrend. It consists of: (1) a large bearish candle continuing the downtrend, (2) a small-bodied candle (spinning top or doji) that gaps down, showing indecision, and (3) a large bullish candle that closes well into the body of the first candle.
How Morning Star Works
The pattern tells a story: candle 1 shows strong selling, candle 2 shows the sellers are exhausting and indecision is taking over, and candle 3 shows buyers have seized control. The smaller the middle candle's body, the stronger the signal. If the middle candle is a doji (open equals close), the pattern is called a "morning doji star" and carries even more weight.
Why It Matters for Traders
Morning stars at major support levels on the daily or weekly timeframe are high-conviction long setups. The entry is above the third candle's high, with the stop below the middle candle's low. The evening star is the bearish equivalent (large green, small body, large red) and signals the end of an uptrend.
