We're now moving into three-candle patterns — and these are some of the most reliable reversal signals you'll find on any chart.
THE MORNING STAR ⭐ (Bullish)
This pattern has three candles and tells a complete story of a power shift from sellers to buyers.
Code
Candle 1: Large RED candle. Sellers are completely in control. Strong bearish momentum.
Candle 2: Small body (can be red, green, or even a Doji). Gaps below the first candle's close. This is the "star" — representing a moment of indecision and hesitation. The sellers are losing momentum.
Candle 3: Large GREEN candle. Opens above the second candle and closes well into the body of the first candle. Buyers have taken FULL control.
The narrative:
Day 1: Sellers dominate. Bears are in charge.
Day 2: Sellers try to continue but momentum dies. The market pauses. Indecision.
Day 3: Buyers explode onto the scene. The tide has completely turned.
This is dawn breaking after a dark night — hence "Morning Star."
Signal: Strong bullish reversal — especially powerful after a sustained downtrend and at a support level.
Ideal conditions:
Appears after a clear downtrend
The middle candle (star) is well-separated from the first candle
The third candle closes at least 50% into the first candle's body
Volume increases on the third candle
Real Example:
EUR/JPY has fallen sharply for 2 weeks. On the daily chart at a major support level:
Day 1: Large red candle, EUR/JPY falls from 162.00 to 160.50
Day 2: Small candle, price barely moves, closes at 160.30 — indecision
Day 3: Large green candle, EUR/JPY rises from 160.40 to 161.80
This Morning Star at major support is a HIGH-PROBABILITY long signal.
THE EVENING STAR 🌙 (Bearish)
The perfect mirror image of the Morning Star.
Candle 1: Large GREEN candle. Buyers in full control.
Candle 2: Small body. Gaps above. Indecision.
Candle 3: Large RED candle. Sellers take complete control.
Signal: Strong bearish reversal after an uptrend, especially at resistance.
The narrative:
Day 1: Bulls dominate.
Day 2: Bulls lose momentum. The market pauses at the top.
Day 3: Bears take over completely. The uptrend is over.
"Evening Star" = the last light before darkness falls on the uptrend.
Combined checklist for both patterns:
Before trading either pattern, confirm:
☑️ Clear preceding trend (don't trade these in sideways markets)
☑️ Pattern appears at a key level (support for Morning Star, resistance for Evening Star)
☑️ Third candle closes significantly into the first candle (50% minimum)
☑️ Higher timeframe supports the reversal direction
☑️ No major news event immediately after that could invalidate the move
Reflection question:
Think about the last time you saw a market reverse sharply. Go back on a chart and look. Is there a Morning Star or Evening Star there?
In most cases — yes. These patterns appear at major turning points constantly. Your job is to learn to RECOGNIZE them before the reversal happens, not after.
