Morning Star Candlestick Pattern on Live Gold

What it shows

Each one gets a blue label marked MS under the low of the third candle.

How Pravex works it out

1. The morning star rule never uses a fixed size: a body, open to close, is long when it beats the 14-candle exponential average of bodies and small when it falls short of it.
2. The morning star starts with a falling candle (close below open) whose body is long, above the average.
3. The middle candle must be small (below the average) and not a doji. Doji, for the morning star, means a body of 5% of the range or less, high minus low, with a range above zero. The top of its body must sit below the first candle’s close, so the bodies do not overlap. Its colour does not matter.
4. The third candle must be rising and close at or above the middle of the first body, (open + close) ÷ 2. Its size is not tested.
5. A downtrend is required for the morning star, measured on the first of the three candles, and with the default it comes down to one comparison: is that close below the average of the last 50 closes?
6. Example numbers, not a live price: the first candle falls from 2,030 to 2,018. The middle candle opens at 2,016 and closes at 2,017. The third rises to 2,025, above the first body’s middle of 2,024.

Settings

Setting	Default	What changing it does
Trend check	SMA50	How the downtrend before the morning star is measured on the first candle: SMA50 compares its close with the 50-candle simple average. The choice that adds SMA200 also needs the 50-candle average below the 200-candle one, so fewer morning star labels appear, and the last choice turns the check off.
Label colour	Blue (#2196F3)	The fill of the MS label under the low of each candle where the morning star pattern is complete; its white text needs a colour it reads well on.

How traders read it

Each candle tells one part of the story. The first is sellers in control. The small middle candle, below the first body, shows that the selling has stopped making progress. The third candle is the buyers taking back at least half of the first drop.

The low of the middle candle is the usual stop, since it is the lowest point of the turn. A third candle that closes near the top of the first body, or above it, is the stronger version. One that barely reaches the middle is the weaker one.

Because the pattern needs three candles, it completes later than a hammer or an engulfing. That costs you some of the move but gives you more to go on.

When it misleads

The gap between the first and middle bodies is the strict part on gold. A candle usually opens at about the last close, so the middle candle needs to trade and close below that close, and often the gap is only cents. The third candle can be small and still pass, as long as it closes past the middle of the first body. One close below the 50-candle average counts as a downtrend for our test. A morning star label on the newest candle is provisional: that candle has not closed, and the shape may stop holding before it does.

Questions and answers

What is a morning star pattern?

Three candles after a fall: a long falling candle, a small candle whose body is below it, and a rising candle that closes at or above the middle of the first body.

How is it different from a morning doji star?

In a morning doji star the middle candle is a doji. In a morning star it is a small candle with a real body.

Is the morning star a strong pattern?

It is one of the better known reversal patterns, since it shows the whole turn. It still fails when it forms into a falling trend with no level below to hold it.

What is a morning star’s bearish twin called?

The evening star: a long rising candle, a small candle above it, then a falling candle that closes below the middle of the first.

Related: Evening Star - Bearish, Morning Doji Star - Bullish, Abandoned Baby - Bullish, All Candlestick Patterns, every indicator.