Forex market tends to change frequently. Assets move up and down on a constant basis, and it is traders’ aim to find these movements at the early stages in order to maximize their profits, and the Morning Star pattern is one of the best patterns for this job.
Morning Star Definition
Morning Star is the candlestick pattern that informs traders about the upcoming bullish market. It consists of three candlesticks and informs traders about upcoming changes in the market. This is usually useful when there is a downtrend in the market, as we can see which assets are going to break their downtrend.
Why is Morning Star important for traders?
- With the help of Morning Start pattern, traders can identify upcoming bullish runs and maximize their profits.
- This is an easy-to-read pattern with clear entry and exit signals.
- It can be used with other reversal indicators for better accuracy.
- Morning Stat pattern can be used for many different assets.
Thorough Morning Star Explanation
To better understand the meaning of Morning Star pattern, let’s take a deeper look at it. Morning Star is the visual pattern that helps traders identify upcoming bullish runs of many different assets. This is the candlestick pattern that consists of three candles. The second candle is always the shortest one, but it only appears after the formation of the third candle.
Morning Star pattern is relatively accurate, but traders are able to increase this accuracy by implementing other uptrend-detecting charts and indicators. Another commonly used pattern in combination with Morning Star is its counterpart, Evening Star, which follows the same principal of finding upcoming trend, but unlike Morning Star, it shows upcoming downtrend that is expected on the market.
Example of Morning Star in Forex
For better visualization, Let’s look at an example of Morning Star in forex. For example, a trader is looking at the EUR/USD currency pair that has been showing a bearish downtrend for some time. After looking at the charts, the trader notices that after a long candle we see one short and one long candle showing an uptrend. This is the signal that a bullish run is coming for EUR/USD and traders can act accordingly.
FAQs on Morning Star Pattern In Forex
What is the difference between morning and evening star?
In essence, they are the same patterns, both indicating change in trend. The difference between these two is that morning star identifies upcoming uptrends, while evening star identifies upcoming downtrends.
Should I use Morning Star in Forex?
It depends on what kind of trader you are. But if you think that this pattern will fit in your trading style, then you should absolutely use it. It is relatively easy to identify pattern, with relatively high accuracy and combines well with other patterns and indicators.
Is Morning Star a bullish pattern?
Yes. Morning Star in Forex is used to identify upcoming bullish runs of different assets. If you are looking for the bearish pattern, then using Evening Star pattern will be the best option.