What Is a Morning Star Pattern?
The Morning Star is a bullish reversal candlestick pattern that typically appears at the bottom of a downtrend. It signals that selling pressure is weakening and buyers may be taking control.
The pattern consists of three candles:
- A long bearish candle
- A small indecision candle (can be bullish, bearish, or a doji)
- A strong bullish candle closing deep into the first candle’s body
- Marks a potential trend reversal from bearish to bullish
- One of the most reliable Japanese candlestick patterns
- Often confirmed with higher volume or support zones
How the Morning Star Pattern Forms
- Candle 1 (Bearish): Sellers dominate, pushing price lower.
- Candle 2 (Indecision): Market pauses — the candle has a small body, showing uncertainty.
- Candle 3 (Bullish): Buyers step in strongly, closing near the highs and reversing momentum.
The key feature is that the third candle closes well into the body of the first, confirming the shift in sentiment.
How Traders Use the Morning Star Pattern in Practice
Traders rarely act on the Morning Star alone. Instead, they use it with other tools for confirmation:
- Look for it at key support levels or demand zones
- Confirm with volume increase or momentum indicators (e.g., RSI divergence)
- Use it to enter long trades with stop-loss below the pattern’s low
- Combine it with higher timeframe analysis for stronger signals
Why the Morning Star Pattern Matters
The Morning Star is widely used because it offers a clear, visual signal of a possible reversal:
- Helps traders spot early bullish momentum
- Works across forex, stocks, indices, and crypto
- Stronger when aligned with confluence (support, order blocks, liquidity grabs)
- Reduces risk of chasing false breakdowns
Example of a Morning Star on EUR/USD
Imagine EUR/USD is trending lower around 1.0850:
- A long bearish candle closes at 1.0835.
- A small indecision candle forms, holding near 1.0830.
- A strong bullish candle follows, closing at 1.0855 — well inside the first candle’s body.
This forms a Morning Star Pattern, suggesting a potential reversal to the upside.
