The Morning and Evening Star patterns take their names from the planets Mercury (appears just before sunrise) and Venus (appears just before complete darkness sets in). As you can gather from the analogies they use to take their names they are both examples of reversal patterns.
The Morning Star appears at the end of a downtrend (night-time) and signals the arrival of an up trend (day-time). It is technically a three-candle pattern however the Star is the second and smallest candle in the formation. The first is a long filled candle that makes new lows for the move. The second, or the Star, is a candle with a small body that gap opens lower than the low of the previous day. The body and wicks are small hence a low trading range for the day. This is followed by a large bodied, bull candle that signifies the arrival of some strong buying pressure.
Conversely the Evening Star is a signal that a bull trend is about to come to an end. The Star of the formation must open higher than the previous day’s close and have a small trading range. It is sandwiched between first, a larger bodied bull candle and second, a large bodied bear candle.
--- by PassionTrading -------
Hello Everyone,
ReplyDeleteI've attached a list of the highest ranking forex brokers:
1. Most Recommended Forex Broker
2. eToro - $50 min. deposit.
Here is a list of money making forex tools:
1. ForexTrendy - Recommended Odds Software.
2. EA Builder - Custom Strategies Autotrading.
3. Fast FX Profit - Secret Forex Strategy.
I hope you find these lists beneficial.