Resources for Forex Trading
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.
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.
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.
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.
