Morning Star Candlestick Pattern – How To Trade and Win Forex With It

0
207
Morning Star Candlestick Pattern - How To Trade and Win Forex With It

Tiếng Việt Português فارسی

For Price Action traders, price signals are always considered an important measure of the market. These are considered price signals in technical analysis. Today, in this article series about candlestick patterns, we will introduce to you the Morning Star candlestick pattern in Forex trading. This is one of the most effective price signals for a trend reversal.

Register an Exness account NowGet $1,000 Free for beginners

What is a Morning Star candlestick pattern?

The Morning Star is a Japanese candlestick pattern that usually appears at the end of downtrend in Forex. They are the starting point for the uptrend of prices. Mastering this entry point will help you open options with a high win rate.

What is a Morning Star candlestick pattern in Forex trading?
What is a Morning Star candlestick pattern in Forex trading?

Structure and characteristics

A standard Morning Star candlestick pattern consists of the following candles:

+ The first candle is a strong bearish candlestick (red).

+ The second candle is a special candlestick called Spinning Top.

+ Finally, the third one is a bullish candlestick (green) with a length at least equal to ½ of the first candle.

Meaning and where to appear

Traders often pay much attention to the Morning Star candlestick pattern at the end of a downtrend. At that time, this is a signal for traders that the price will rise again. Sometimes, they can also appear in an uptrend and signal a continuation of the uptrend.

The position of Morning Star appearing on the price chart
The position of Morning Star appearing on the price chart

Combining the Morning Star candlestick pattern, you will receive a Bullish Pin Bar candlestick pattern. This is a warning signal for a bearish to bullish reversal. However, with a greater formation time, its accuracy will be higher than a single Pin Bar.

Meaning of the Morning Star candlestick pattern
Meaning of the Morning Star candlestick pattern

The variant Morning Star candlestick pattern

Variant Morning Star candlestick patterns are also highly accurate. They are also on the list of strong bullish signals in the market. Depending on the second candlestick, traders divide it into the following:

(A) Doji Star (the second candle is a Doji).

(B) Pin Bar Star (the second candle is a Pin Bar).

(C) Abandoned Baby (when a gap appears). This type is very rare and has very high accuracy.

Different variant Morning Star patterns

How to trade and win Forex with the Morning Star candlestick pattern

Notes: These are transactions that should only be made on Demo accounts.

Below, I will demonstrate 2 basic trading strategies in Forex so that you can verify the reliability of the Morning Star.

Strategy 1. Place a BUY order at the bottom with the Morning Star

Specifically, when the price is moving but suddenly, the Morning Star candlestick pattern appears, you should focus on opening BUY orders as follows:

+ Entry Point: As soon as the price completes the candlestick pattern.

+ Stop-Loss: At the lowest price level before rebounding.

+ Take-Profit: When the price touches old support levels that have been formed in the past.

Place a BUY order at the bottom with the Morning Star candlestick

Strategy 2. Trade following the trend effectively with Morning Star

In this Forex trading strategy, you use the price trend to increase trading accuracy. Specifically, when the price is increasing and the Morning Star pattern appears out of a sudden, focus on opening BUY orders because it is likely that the price will continue to increase.

How to open an order is as follows:

+ Entry Point: As soon as the price completes the candlestick pattern.

+ Stop-Loss: At the shadow of the candlestick with the longest tail in the Morning Star pattern

+ Take-Profit: When the price touches old support levels that have been formed in the past.

Forex trend trading with the Morning Star
Forex trend trading with the Morning Star

In conclusion

Many experienced traders use the Morning Star as an important reversal signal to determine the market trend. Sometimes you just need to combine it with a few other signals. Then you already know how the market is going. Get familiar with the Morning Star candlestick pattern on a Forex demo account below to verify its accuracy.

Register an Exness account NowGet $1,000 Free for beginners

LEAVE A REPLY

Please enter your comment!
Please enter your name here