The candlestick trading bible
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28 THE CANDLESTICK TRADING BIBLE The morning star The morning star pattern is considered as a bullish reversal pattern, it often occurs at the bottom of a downtrend and it consists of three candlesticks: -The first candlestick is bearish which indicates that sellers are still in charge of the market. -The second candle is a small one which represents that sellers are in control, but they don’t push the market much lower and this candle can be bullish or bearish. -The third candle is a bullish candlestick that gapped up on the open and closed above the midpoint of the body of the first day, this candlestick holds a significant trend reversal signal. The morning star pattern shows us how buyers took control of the market from sellers, when this pattern occurs at the bottom of 29 THE CANDLESTICK TRADING BIBLE downtrend near a support level, it is interpreted as a powerful trend reversal signal. See the illustration below: The chart above helps us identify the morning star pattern and how it is significant when it is formed at the bottom of a downtrend. As you can see the pattern occurred at an obvious bearish trend. The first candle confirmed the seller’s domination, and the second one produces indecision in the market, the second candle could be a Doji, or any other candle. 30 THE CANDLESTICK TRADING BIBLE But here, the Doji candle indicated that sellers are struggling to push the market lower. The third bullish candle indicates that buyers took control from sellers, and the market is likely to reverse. This is how professional traders analyze the market based on candlestick patterns, and this is how you will analyze financial markets if you can master the anatomy of candlestick patterns and the psychology behind their formations. Download 2.7 Mb. Do'stlaringiz bilan baham: |
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