What it means
A morning star is three candles: a large bearish candle, a small-bodied candle (the star), and a large bullish candle that closes above the midpoint of the first. An evening star is the bearish mirror.
Why traders use it
The sequence shows strong selling, then indecision, then strong buying: a reversal told over three periods instead of one.
Chart examples
Morning star
Evening star
How to identify it objectively
- 1Candle 1: large body in the trend direction.
- 2Candle 2: small body, often below (or above) candle 1's close.
- 3Candle 3: large opposite body closing beyond candle 1's midpoint.
- 4Best after an extended move into a level.
Bullish use
- 1Large bearish candle, small star, large bullish candle.
- 2Candle 3 closes above candle 1's midpoint.
- 3Stop below the star's low.
Bearish use
- 1Large bullish candle, small star, large bearish candle.
- 2Candle 3 closes below candle 1's midpoint.
- 3Stop above the star's high.
What confirms it
- The midpoint close.
- Location at a level.
What invalidates it
- Price closes beyond the star's extreme.
How a hypothetical setup is built
Entry
On candle 3's close.
Stop
Beyond the star.
Target
The start of candle 1 or the prior swing.
A hypothetical illustration of how the concept is turned into a plan, not a recommendation. Practise it on a paper account first.
Related concepts
- Candlestick PatternsDoji Candlesticks
- Candlestick PatternsBullish and Bearish Engulfing
- Candlestick PatternsHarami and Harami Cross
Historical testing
Not tested on The Tradeskill.
Limitations: when it fails
- Rare in clean form.
- Candle 3 can be very large, making the entry late.
- Definitions of "small" and "large" vary.
Knowledge check
Pick an answer to see the explanation. Nothing is saved.