Morning Star candlestick pattern is usually used to determine the bottom of price. With only 3 candles, you can understand the movement of price and trading UP correctly.
How to realize Morning Star candlestick pattern
Morning Star pattern often appears at the end of a downward trend. The pattern is made of 3 candles:
Large body bearish candle (1st candle – red candlestick) signs the downward trend of price.
Doji (2nd candle) signs the consolidation and indecision of price. In some cases, a small body candle appears, it can be a red or green candle.
Bullish candle (3rd candle – green candlestick): Price begins to rise.
The meaning of Morning Star candlestick pattern
At the end of a downward trend, price will falls sharply, creating a long red candle. However, at the next candle, price moves slowly and indecisively, creating a doji or small body candle.
When the sellers have sold most, the buyers become active, creating a long green candle. This is price reversal.
How to trade UP using Morning Star candlestick pattern
This is a pattern for finding the bottom of price, which means that traders in the market estimate that price will go back to its normal trend. Trade UP when you see this pattern. If you observe one minute candlestick chart, you can open an UP in five minutes. If observe five minute candlestick chart, you an open an UP with time frame from 15 minutes.
You can test this pattern by using Demo Olymp Trade account