MORNING STAR CANDLESTICK PATTERN
The morning Star candle is a combination of 3 candles 1st is a Red candle 2nd is a Doji candle red or green and 3rd candle should be a green candle. When the market is in a downtrend, the Morning Star candle is formed at the lower level near the support zone or demand zone, and from there signals a bullish reversal.
When a Morning Star candle is formed, We should avoid selling the stock, if it is trading above the label of the Morning Star candle formation.
Characteristics of Morningstar candlestick pattern:-
If the market condition is downtrend and reaches the near support zone or demand zone, in the support zone
1 st Candle should be a red candle,
2 nd Candle anything red or candle but should be a doji candle,
3 rd Candle should be a strong green candle equal to the first red candle, so in this way morning star candle has structure.
You can see in this chart
How to trade with Morning Star candle?
What should be the entry point for trade?
Wait for the third candle to complete.
After breaking the 3rd candle you have to enter above 3rd green closing candle.
Look for supporting indicators like increased volume and RSI.
What should be the stoploss for trade?
Place stoploss order below the low of the second doji candle.
Keep your risk manageable (usually 1-2% of your account).
Consider market volatility when placing a stop-loss order.
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