Trading term

What is Morning star (candlestick)?

A morning star is a three-candle bullish reversal made up of a large down candle, a small-bodied candle that gaps lower, and then a large up candle. That third candle closes well into the first one's body, marking selling exhaustion at a bottom.

Read the three candles as a sequence. The first extends the decline with conviction. The second gaps down but then goes almost nowhere — a small body, sometimes a doji — which is the important part: sellers had a fresh low and could not press it. That stall is the star. The third candle then rallies decisively and closes well up inside the first candle's body, confirming that buyers have taken over.

The classical requirement is that the third candle closes above the midpoint of the first candle's body. The deeper it closes into that body, the stronger the reversal is considered. In practice the gaps that the textbook describes are common in stocks but rare in continuously traded markets like forex and crypto, where the definition is usually relaxed to just the three-candle shape.

Its bearish mirror is the evening star, which forms the same way at the top of a rally.

Note the spelling trap: this is 'morning star', the candlestick pattern. Morningstar is an unrelated investment-research firm.

Decline, stall, recovery
IN CONTEXTA hard down day, a stall on the low, then a decisive recovery.ZOOMED INmidpoint of c1 bodyc1starc3The third candle must close above the MIDPOINT of the first body — here $56.00.

The star gaps below the first candle and goes nowhere; the third candle then closes at $57.00, above the $56.00 midpoint of the first body. That close is what makes it a pattern.

For example

A stock drops from $58.00 to close at $54.00. The next candle gaps down and trades in a tiny $53.00–$53.20 range — the star. The third candle opens at $53.60 and rallies to close at $57.00, well above the $56.00 midpoint of the first candle's body. The decline is over.

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Why it matters to you

Three candles carry far more information than one. A single hammer can be noise, but a decline, a stall on a fresh low, and a decisive recovery is a sequence that is hard to produce by accident — which is why the morning star is among the more respected reversal patterns rather than a shape you can find anywhere on a chart.

⚠ The third candle has to do the work

Traders often call a morning star as soon as they see a small candle after a big red one, and buy before the third candle has closed. Until that final candle closes above the midpoint of the first body, there is no pattern — there is a pause, which resolves downward at least as often as it resolves up.

Frequently asked questions

What is a morning star candlestick pattern?

It's a three-candle bullish reversal: a large down candle, a small-bodied candle that gaps lower, and then a large up candle that closes above the midpoint of the first candle's body. It signals that a decline has run out of sellers.

How reliable is the morning star pattern?

It's considered one of the stronger candlestick reversals because it needs a three-candle sequence rather than a single shape. Reliability improves when it forms at a support level, when the third candle closes deep into the first body, and on higher volume.

What's the difference between a morning star and an evening star?

Direction and location. A morning star forms at the bottom of a decline and is bullish; an evening star forms at the top of a rally and is bearish. The construction is identical, just mirrored.

Does a morning star need a gap?

The classical definition includes gaps either side of the star, which happens readily in stocks. In markets that trade continuously — forex and crypto — those gaps rarely occur, so most traders accept the pattern without them provided the three-candle shape holds.

Related terms

Anchored VWAPAnchored VWAP is a volume-weighted average price that starts from one candle you choose, rather than resetting at the start of each session. You anchor it to a meaningful event — an earnings gap, a major low, a breakout — and it tracks the average price everyone has paid since.Ascending triangleAn ascending triangle is a bullish continuation pattern: a flat horizontal resistance line on top, with a rising trendline of higher lows beneath it. As the higher lows squeeze price against the ceiling, pressure builds — and it usually resolves with a breakout up through the resistance.ATR (Average True Range)ATR (Average True Range) measures how much a security typically moves in a period — its volatility — as an average of recent trading ranges. It doesn't say which direction price is heading, only how far it tends to travel, which makes it a core tool for stop-losses and position size.Bearish engulfingA bearish engulfing is a two-candle reversal pattern in which an up candle is followed by a down candle whose body completely covers it. The second candle opens above the previous close and closes below the previous open.
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