If you want to become a serious trader then you must master the art of candlestick charting. There are dozens of candlestick patterns that warn of the potential trend reversal as well as trend continuation. There are simple as well as complex candlestick patterns. Morning Star is a three stick candlestick pattern that takes three days to form on the charts and is considered to be a complex pattern. It is almost similar to the Bullish Doji Star Pattern.
In case of the Morning Star, the second day will be almost a Doji whereas in case of the Bullish Doji Star, the second day will be a real Doji with the open and close prices exactly equal. The first day is a down day with a large bearish candle forming as happens in a downtrend. The second day starts with a gap opening indicating that bears are still in action and are continuing to push the prices down. For the rest of the day, there is a tight contest between the bulls and bears and the open and the close price are almost the same. The third day is extremely bullish with the bulls pushing the prices up regaining the lost ground on the last two days. When either these two patterns appear on the chart, it means a trend reversal.
The Three White Soldiers is another bullish trend reversal pattern that takes three days to form with three bullish candles in a row. When this pattern appears in down trend, it signals a quick trend reversal and start of an uptrend. In order to identify the Three White Soldiers, look for three consecutive up days in a downtrend. Now, if the open, close, high and low of the second day are higher than those of the first days and the open, close, high and low of the third day are higher than those of the second day, you have spotted a true Three White Soldiers Pattern.
Three White Soldiers Pattern indicates extreme bullishness in the market and is taken to be a strong trend reversal signal. Always place the stop loss at the low of the second day in order to be on the safe side of the market. Watch these shocking Forex Trader PRO Videos FREE that show a total blockhead making 10 out of 10 winning trades. Master these highly profitable Candlestick Patterns with this FREE 82 page PDF Candlestick Guide.