Morning star

A morning star is a three-candle bullish reversal after a decline. A long down candle, then a small quiet one. The third closes above the first body's midpoint.

Illustration: Morning star

In depth

Take a first candle that opens at 104 and closes at 100. Its body midpoint is 102. The middle candle chops between 99.60 and 100.10 and dips to 99.20. A third candle closing at 102.40 qualifies, because buyers took back more than half the sell-off. A close at 101.20 does not.

The middle candle's colour carries no information, so stop looking at it. A small body already says neither side won that bar. The decline in front of the pattern is required. The level is the lowest low of all three candles, wicks included. Support goes at 99.20, even though no body ever traded there.

Why it matters

Where you draw the line changes every trade that follows. A stop under 99.20 sits beyond a price the market already rejected. A stop under 100 sits inside it and gets collected on the next probe. The pattern is a reason to draw a level. The trade is price returning to it later and holding.

How TraderLog tracks this

TraderLog groups results by how long trades were held, so slow reversals sit apart from quick scalps. Write the level and the three candles in the day's free-text entry. Fills arrive from Schwab, IBKR or CSV, and a weekly report card sums up the week.

Frequently asked questions

A three-candle bullish reversal after a decline. A long down candle, a small pause, then a close above the first body's midpoint.

No. Its colour carries no information. The small body is the message, and it means neither side controlled that bar.

Keep your Morning star trades on the record in TraderLog

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