LINK
- Morning Star ~ must be in an downtrend, with the first candlestick continuing the trend showing a large red body, the second candlestick ideally gaps down at the open and will be a small bodied candlestick (either red or green) and is the star, the third candlestick ideally gaps up from that second candlestick and opens somewhere inbetween the first and that second candlestick and closes a bullish green candlestick penetrating into the body of that first red candlestick, with it being the further the penetration the better, even rising above the very top of that first candlestick. Confirmation is price starting to trade above the third candlestick or even above the whole pattern. The physcology is that the first candlestick is showing a bearish trend with the bears showing confidence, however, the second smaller candlestick shows indecision and a potential weakening of the bears confidence (the colour of it is down to your own discretion), although its still opened lower. The third candlestick is further damaging for the bears, as it shows a turnaround in sentiment with the bulls seizing the moment after the bears showed indecision, and again as mentioned, the further it penetrates the better, leading to the bears starting to run scarred potentially leaving the door open for the bulls to force the trend upwards. Don’t forget, the 3 candlestick morning star pattern will form a larger timescale hammer of some nature (ie. it could be red or green bodied depending how far it penetrated, see 4 minutes of this link, it also leads to examples)
F=MA 