📊 Price Action·intermediate

Morning Star

A three-candle bullish reversal pattern that signals the bottom of a downtrend — small body in the middle, big bullish candle to confirm.

A morning star is three candles in sequence. Candle 1: a strong bearish candle (the downtrend in progress). Candle 2: a small-bodied candle (often a doji or spinning top) that gaps down or closes near the first candle's low — this is the moment of indecision. Candle 3: a strong bullish candle that closes well into the body of the first candle, confirming the reversal. The psychology is clean. The first candle shows sellers in control. The second shows them losing momentum — the trend stalls. The third shows buyers taking over with conviction. Together, the three candles paint a complete handoff from bears to bulls. The entry is on the close of the third candle or on the next candle's open. The stop is below the low of the entire pattern. Morning stars are most reliable at major support and after extended downtrends.

Real trade example

EUR/USD printed a textbook daily morning star at 1.0450 in October 2023 — big red candle, doji, big green engulfing candle. The reversal led to a 700-pip rally over the next four months.

Related terms

Evening Star

intermediate

A three-candle bearish reversal pattern that signals the top of an uptrend — small body in the middle, big bearish candle to confirm.

Doji

intermediate

A candlestick where the open and close are almost equal — indecision between buyers and sellers.

Engulfing Candle

intermediate

A candle whose body fully swallows the previous candle's body — a strong reversal signal.

Hammer

beginner

A candlestick with a small body near the top and a long lower wick — a bullish reversal signal after a downtrend.

Lower Low

beginner

A swing low that's lower than the previous swing low — one of the two confirmations of a downtrend.

Market Structure

intermediate

The framework of swing highs and lows that defines whether a market is trending up, trending down, or consolidating.

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