What is a Morning Star Pattern?

Under the conditions of a down market, the morning star candlestick pattern tends to signify the gaining of control by buyers over the market. The morning star formation is a trend reversal pattern and a bullish sign which occurs after the market has reached a new low.

Three candlesticks form the pattern. The first one has a long black real body. The second candlestick, which is of smaller size and short body, gaps (opens) lower than the first (occurring in a star position). It may be black or white. The third candlestick has a white real body which closes at least halfway up into the first candlestick's black real body.

Before traders embark on the purchase of the currency pair, they should wait for the third candle to close in order to confirm the reversal trend.

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