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What is Morning Star Candlestick Pattern

03 Sep 2023

What is the significance of Candlestick Patterns?

All technical analysts use candlestick patterns to identify profitable stock buying and selling opportunities in the financial markets. While there are various phases in the markets where the market can move in a downtrend, uptrend, or in no specific trend, some patterns act as a precursor to the change in trends. Everyone wishes to identify uptrends before they start, and the best way to do that is by looking at the scrip's candlestick charts.

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What is the Morning Star Candlestick Pattern?

The morning star candlestick pattern is a three-candlestick pattern that signifies bullish sentiment and the start of an uptrend in markets. The morning star pattern is usually considered a reversal pattern, and it is found when the trend reversal is very near. In fact, the trend reversal in markets often starts from this pattern only.

Morning Star candlestick pattern has one large red candle, another small red or green candle with long bottom wicks, and the third candle needs to be a long green candle bigger than the previous one or two candles. The third candle usually has a small or no wick at the top, signaling a trend reversal. 

How to Use the Morning Star Candlestick Pattern?

The Morning Star candlestick pattern is a multiple candlestick pattern that signifies bullish sentiment and the start of the uptrend in the markets. Many traders consider this to be a reversal pattern, and it is found when the trend reversal is very near. Moreover, many times the market uptrends often start from this pattern.

Morning Star pattern has one large red candle at the start, another small red or green candle with long bottom wicks, and the third candle needs to be a long green candle bigger than the previous one or two candles. The third candle usually has a small or no wick at the top, signaling a trend reversal.

Limitations of Morning Star Candlestick Pattern

Visual patterns are hard to recognize for beginners, and Morningstar is no different. Moreover, trading based on visual patterns is considered quite risky, and visual patterns alone cannot forecast accurately. Hence, using a Morningstar candlestick pattern along with other screeners or measures is always better.

By now, you are a pro at identifying and trading Morningstar patterns, so look out for them in the real market. Beware of fake breakouts, and trade confidently by checking real-time volume throughout the market times through our applications.

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