Morning star and evening star

Morning star and evening star are three-candle reversal patterns used in candlestick charting to spot a change in trend direction. A morning star forms at the bottom of a downtrend and signals a possible shift to the upside, while an evening star forms at the top of an uptrend and signals a possible shift to the downside. Both are considered relatively reliable reversal signals precisely because they require three separate candles to line up in a specific way, rather than relying on a single candle in isolation.

A morning star begins with a long red or dark candle continuing the existing downtrend, confirming that sellers are still in control. The second candle is small, with a body that gaps down from the first, showing that the selling pressure has stalled and the market is indecisive. The third candle is a long green or light candle that closes well into the body of the first candle, confirming buyers have taken over. An evening star is the mirror image, an uptrend followed by a long green candle, a small indecisive candle that gaps up, and then a long red candle that closes deep into the first candle's body, confirming sellers have regained control.

Traders generally want to see the pattern appear after a clear, sustained move in one direction, since the same three candles carry much less meaning in a sideways or choppy market. Volume on the third candle is often used as a secondary confirmation, higher volume on the reversal candle suggests conviction behind the shift. As with any candlestick pattern, morning and evening stars work best as one input alongside broader trend analysis, support and resistance levels, and other indicators, rather than as a signal to trade on their own.