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CANDLESTICKS

Page 9

The Morning Star formation:
The morning star formation is one that consists of three candlesticks. For the

following examples, we will be referring to daily candles for ease of understanding.

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The Morning Star starts with a Bearish/ red candlestick which represents selling acceleration. The next candlestick can either be a Spinning Top, a Doji or a Hammer/ Pin bar. This second candlestick represents indecision and a sudden halt to the downside acceleration. The third and final candlestick in this formation is a bullish/ green candlestick that must close within the upper 40% of the first bearish/ red candlesticks range. Upon this bullish confirmation, a buy trade can be executed upon the opening of the next candlestick.

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The Evening star formation:
The Evening star formation again consists of three candlesticks. For the following examples, we will be referring to daily candles for ease of understanding.

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The Evening Star starts with a bullish/ green candlestick which represents buying advancements. The next candlestick can either be a Shooting Star, a Doji or a Spinning Top. This second candlestick represent s indecision and a sudden halt to the upside advancements. The third and final candlestick in this formation is a bearish/ red candlestick that must close within the lower 40%.the first bullish/ red candlesticks range. Upon this bearish confirmation, a sell trade can be executed upon the opening of the next candlestick.

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