CANDLESTICK CHARTS PATTERN
One group of fascinating Reversal Patterns is those that include Stars. A star is a small real body (white or black/red) that gaps away from the large real body preceding it. in other words, the star’s real body can be within the prior session’s upper shadow; all that is needed is that the real bodies do not overlap. if the star is a doji instead of a small real body, it is called a doji star. the star, especially the Doji star, is a warning that the prior trend may be ending.
Star Candlestick Patterns
The Star’s small real body represents a stalemate between the bulls and bears. the bull are obviously in charge in a briskly ascending market. with the emergence of a star in such an environment, it is a signal of a shift from the buyers being in control to a deadlock between the buying and selling forces. this deadlock may have occurred either because of a diminution in the buying force or an increase in the selling pressure. either way, the star tells up the rally’s prior power has slightly dissipated. this means the market is vulnerable to a setback.
the same is true, but in reverse, for a star in a downtrend. the long black candle during the downtrend visually reflects that the bears are in command. A change is seen in the advent of the star, which signals an environment in which the bulls and the bears are more in equilibrium. in other words, the downward energy has thus been cooled. this is not a favorable scenario for a continuation of the bear market.
The four type of Stars Candlestick Patterns
- The Morning Star;
- the evening star;
- the doji stars;
- the shooting star.
The Morning Star
The Morning Star
the Morning Star is bottom reversal patterns. its name is derived because, like the morning star(the nickname for he planet mercury) that foretells the sunrise, it presages higher prices. there are three candle lines comprising this pattern.
The Evening Star
the Evening star is the bearish counterpart of the morning star pattern. it is aptly named because the evening star (the nickname for the planet venus) appears just before darkness sets in. Since the evening star is a top reversal, it should be acted upon if it arises after an uptrend. three lines compose the evening star. the first is a long white real body, the next is a star. the star is the first hint of a top. the third line corroborates a top and completes the three-line pattern of the evening star. the third line is a black real body that closes sharply into the first period’s white real body. I like to compare the evening star pattern to a traffic light.
Doji Star- The Morning doji and Evening doji
An Evening Star that has a doji instead of a small real body as the second candle is called an evening doji star. The evening doji star is a distinctive form of the regular evening star. We saw an example of this pattern in this images.
A morning star that has a doji as the star portion is a morning doji star. This type of morning star can be a meaning full bottom.
The Shooting star and the inverted hammer
the shooting star has a small real body at the lower end of its range with a long upper shadow. we can see how this line’s name is derived. it looks like a shooting star with its long tail blazing across the sky.
As with all stars, the color of the real body is not important. the shooting star pictorially tells us that the market opened near its low, then strongly rallied and finally backed off to close near the opening. in other words, that session’s rally could not be sustained.
since the shooting star is bearish reversal signal, it must come after a rally. an ideal shooting star has a real body that gaps away from the prior real body.
Multiple candlestick patterns
- Engulfing Patterns
- The Harami Pattern
- The Stars Patterns
- The Morning Star
- The Evening Star
Single Candlestick Patterns