Morning and Evening Star belongs to a candle formations (paterns) indicator type. (Read more about candle formations here)
Morning Star is a bullish reversal pattern consisting of three candles, which usually occurs after a strong downtrend. It gives a buy signal and also indicates a potential support level.
Below is the example of the Morning Star pattern in the candle chart:
Evening Star is a bearish reversal pattern consisting of three candles, which usually occurs after an uptrend. It gives you a sell signal, and also indicates a potential resistance level.
Below is an example of the Evening Star pattern in a candle chart:
Methods of use:
1. When the Morning Star pattern (highlighted in green) occurs, it is a signal to buy.
2. When the Evening Star pattern (highlighted in red) occurs, it is a signal to sell.
