Morning Star Doji

Morning Star Doji

In this example, Morning Star trading strategies could have been based on the market’s low price valuations . As a result, we can see that Morning Star candlestick formations are a great way to buy low before selling high. The chart graphic shown above has given a model of how the Morning Star trading approach begins. The most important aspect of the formation is the middle Morning Star candle because it indicates a period of indecision required for a reversal.


After declining from above 180 to below 120, Broadcom formed a morning doji star and subsequently advanced above 160 in the next three days. These are strong reversal patterns and do not require further bullish confirmation, beyond the long white candlestick on the third day. After the advance above 160, a two-week pullback followed and the stock formed a piecing pattern that was confirmed with a large gap up. The neutral doji candlestick pattern can be a useful tool in determining market sentiment, as it can signal a potential change in price momentum in any direction.

  • The small doji – or the middle candlestick – must create a lower low and must be central to make it a valid signal.
  • A candlestick doji pattern is a candle that lacks a real body.
  • The black candlestick confirms that the decline remains in force and selling dominates.
  • Live streams Tune into daily live streams with expert traders and transform your trading skills.

The performance quoted may be before charges, which will reduce illustrated performance. Personally, they are not the first thing I look for but when I do see them appear – you can bet your house that I’m going to take a potential trade from it. As you can see this is a strong pattern and can work wonders. Once this has been set, we just have to wait for the market to hit the buy order and execute the trade.

There are no chart patterns, no signals or indicators that will forecast exactly the same thing in every situation. Please keep that in mind as you consider these and other candlestick chart patterns. In both cases the first candlestick that follows the doji star is used as confirmation of a break in the trend. In the case of the Evening Doji Star, if the last candlestick in figure 1 were white instead of black, then the doji star warning would be negated. The bullish Doji Star pattern is a three-bar formation pattern that develops during a downtrend.

Doji Morning Star Candlestick

After a steep decline since August, the formed a bullish engulfing pattern , which was confirmed three days later with a strong advance. The 10-day Slow Stochastic Oscillator formed a positive divergence and moved above its trigger line just before the stock advanced. Although not in the green yet, CMF showed constant improvement and moved into positive territory a week later. Look for bullish reversals at support levels to increase robustness. Support levels can be identified with moving averages, previous reaction lows, trend lines or Fibonacci retracements.

There is a resistance zone above the Morning Doji Star formed by a Long Black Candle, and this is at this moment the biggest threat for the bulls. Support; is when the market follows a pattern in how low the market is willing to go and a line is drawn to mark that support trend. Usually, prices are expected to rise after touching the support line. “So how long does it really take to become a proficient investor and trader? I would rather be direct and tell you like it is than say you can just attend a weekend seminar and begin trading on Monday like a pro. It doesn’t happen like any other profession, and trading and investing is no different.

Is morning doji star bullish ?

As mentioned before, the corporate career development networking is a short term topping formation, and any break above the high of this candle is a failed confirmation. When a shooting star forms near a resistance level, a very powerful resistance level is created. Now, with the third candle gapping in the opposite direction of the trend, we have confirmation that a more significant trend reversal has taken place. Doji StarNotice, the Evening Doji star image above is an abandoned baby top, while the morning doji star is not. As you can see in the example above it’s compact, if the lows are lower or the highs are higher, then this is not a morning doji star. takes no responsibility for loss incurred as a result of the content provided inside our Trading Room.

Double Bottom Chart Pattern; this pattern shows the drop of a stock, market or crypto, then a rebound, then another drop followed by another rebound. Experts say the first drop´s advance should be between 10 to 20% and second drop about 3 to 4%. Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances.

A daily chart gap happens when the stock closes at one price but opens on the following day at a different price. The Doji candlestick pattern is characterized by its cross, inverted cross, or plus sign shape, which reflects that the open and close prices are the same. It has very little or no real body, while the upper and lower shadows may be of varying sizes. Alone, the Doji candlestick is a neutral pattern but may also feature in a number of important patterns.

However, Day 2 was a Doji, which is a candlestick signifying indecision. Bears were unable to continue the large decreases of the previous day; they were only able to close slightly lower than the open. Fibonacci extension tool is used to find out target levels in this trading strategy. The origin/start of retracement will also act as swing high here. The opposite occurring at the top of an uptrend is called an evening star. Taking a microscope to the performance numbers shows that downward breakouts outperform upward ones both in the 10-day performance rank and by the average move 10 days after the breakout.

Money Flows

As ever, careful trading and strong risk management are also key. Adding to the MANISH’s query , Is it possible to make money in market on daily basis and run your house, means Is it possible to generate a salary type income from trading. I have got the essence of both your point and the candle stick pattern, so may be with time and experience I might be able to answer it. Nevertheless, as I have mentioned earlier, you need to have some amount of flexibility. Finding textbook definitions is not easy in real market situations. The stoploss for a long trade is the lowest low of the pattern.

If you are planning to trade doji star pattern alone then you may not become a profitable trader. When a big bearish candlestick forms then it represents the downtrend with a large momentum of sellers. Then the formation of a Doji candlestick indicates the balance of forces of buyers and sellers.

The piercing pattern is made up of two candlesticks, the first black and the second white. Both candlesticks should have fairly large bodies and the shadows are usually, but not necessarily, small or nonexistent. The white candlestick must open below the previous close and close above the midpoint of the black candlestick’s body. A close below the midpoint might qualify as a reversal, but would not be considered as bullish. The best suggestion to trade this pattern is with the confluence of other technical price patterns.

I have found that the best setups are those in which the primary trend is upward and the morning doji star appears as part of a downward retrace in that upward trend. When price breaks out upward, it joins with the uptrend already in existence and away it goes. The best move 10 days after the breakout is a drop of 6.25% in a bear market. I consider moves of 6% or higher to be good ones, so the morning doji star does well. All ranks are out of 103 candlestick patterns with the top performer ranking 1. “Best” means the highest rated of the four combinations of bull/bear market, up/down breakouts.

The Shooting Star Candlestick Pattern & the Hammer Candlestick pattern

Waiting for a confirmation on the 4th day may not be necessary while trading based on a morning star pattern. In terms of trading statistics and trading tactics, there isn’t much of a difference, but in a bear market, the performance of the morning doji star candlestick outperforms the morning star. With the intel gathered from this morning doji star candlestick pattern, it is possible for traders to make a trading decision off of it.

On average markets printed 1 Doji Star pattern every 146 candles. It starts with a long candle, gaps to draw a doji and then it reverses with a bigger candle in the opposite direction. There are a few other single-session patterns that can be useful. Spinning tops, for instance, are similar to long-legged doji but with a little bit more width on their body.

The gravestone doji is a shooting star with virtually no real body, the open and close are exactly the same. Smaller gaps, such as this one, tend to fill in the short term. Even if one had waited for the high of the third candle in morning star to be broken above, five points could have been made in that short amount of time. Additionally, the morning star works very well when it occurs at previous support levels. The first two bars are the typical star setup discussed above. The major difference with this pattern is the third candle in the formation.

This is also a reversal pattern, but in this case, it signals the potential end of the uptrend. An evening star is a stock-price chart pattern used by technical analysts to detect when a trend is about to reverse. A doji is a trading session where a security’s open and close prices are virtually equal. A morning star is a visual pattern, so there are no particular calculations to perform. A morning star is a three-candle pattern with the low point on the second candle. However, the low point is only apparent after the close of the third candle.

Leave your comment