What Are the Morning Star and Evening Star?
The morning star and evening star are reversal patterns made of three candles. The morning star stands at the end of a downtrend and announces a possible turn upward; the evening star stands at the end of an uptrend and warns of a turn downward. Both consist of a long candle in the direction of the trend, a small candle, the star, and a long candle in the opposite direction.
The patterns come from Japanese candlestick analysis; Steve Nison described them for the West in Japanese Candlestick Charting Techniques (1991). The name alludes to the sky: the morning star appears shortly before sunrise and announces the day, while the evening star appears before darkness falls.
Among the candlestick patterns, the two stars are among the best-known three-candle patterns. Their middle candle can be a doji; the pattern is then called a morning doji star or evening doji star.
How Do You Identify a Morning Star and an Evening Star?
You can identify a morning star by the sequence long, small, long: a long bearish candle is followed by a small candle that lies lower, and then by a long bullish candle. For the evening star, everything applies in mirror image.
- A recognizable trend runs before the pattern: a downtrend for the morning star, an uptrend for the evening star.
- The first candle is long and runs in the direction of the trend; its body is clearly larger than the bodies of the candles before it.
- The second candle, the star, has a small body that does not reach into the body of the first candle. Its color does not matter.
- The third candle runs against the old trend and closes deep inside the body of the first candle; as a rule of thumb, at least beyond its middle.
- The star marks the extreme of the pattern: in the morning star it holds the lowest low, in the evening star the highest high.
What Lies Behind the Morning Star and Evening Star?
The three candles show how a trend loses strength and the other side takes over. In the morning star, the first candle shows that sellers still have the market firmly in hand: the price falls throughout the period and closes near the low.
In the second period, the price at first falls further, but the open and close lie close together. Sellers no longer manage a big step; the small body shows that supply and demand are converging. On its own, that would only be a hesitation.
The third candle is decisive: buyers drive the price far upward, deep into the body of the first candle. With that, a large part of the decline has been recovered, and anyone who sold at the low is at a loss. In the evening star, the same story runs in reverse: a strong rise stalls, and the third candle gives back a large part of it.
What Variants Exist?
The variants differ mainly in the middle candle and in how clearly it sets itself apart from the other two candles. The table at the end of the section summarizes them.
Morning Star
The morning star is the basic bullish form: a long bearish candle, a small star below it, and a long bullish candle that closes above the middle of the first body. It stands after a downtrend and announces a possible turn upward. The deeper the third candle reaches into the first body, the clearer the pattern.
Evening Star
The evening star is the bearish counterpart: a long bullish candle, a small star above it, and a long bearish candle that closes below the middle of the first body. It stands after an uptrend and warns of a turn downward. As with the morning star, the pattern is complete only with the close of the third candle.
Morning Doji Star and Evening Doji Star
If the star is a doji, whose open and close are almost the same, the pattern is called a morning doji star or evening doji star. The doji shows complete balance in the middle of the pattern; many authors therefore regard this variant as a somewhat clearer sign than the basic form. Without the third candle, only a doji star remains; what it shows on its own is explained on the page about the doji.
Abandoned Baby
The abandoned baby is a rare special form of the doji star: the doji sits with a gap next to both neighboring candles, in such a way that not even the wicks overlap. It therefore stands abandoned between two candles, hence the name. On forex and crypto pairs, this hardly ever happens; FinScans has no separate trigger for it.
Stars Without a Price Gap
In the textbook, there is a price gap between the body of the first candle and the star, and often also between the star and the third candle. On stock exchanges, such a gap forms overnight. In forex and crypto trading, by contrast, each candle begins at the close of the previous one, so gaps are rare. What counts here is that the body of the star does not reach into the body of the first candle and that the third candle clearly breaks away from it; check on the chart how clearly the star sets itself apart.
| Variant | Trend before | Middle candle | Third candle | Meaning |
|---|---|---|---|---|
| Morning star | Downtrend | Small body below the first body | Bullish, close above the middle of the first candle | Possible turn upward |
| Evening star | Uptrend | Small body above the first body | Bearish, close below the middle of the first candle | Possible turn downward |
| Morning doji star | Downtrend | Doji below the first body | As with the morning star | Turn upward, balance in the middle |
| Evening doji star | Uptrend | Doji above the first body | As with the evening star | Turn downward, balance in the middle |
| Abandoned baby | Downtrend or uptrend | Doji with a gap even between the wicks | Beyond a second gap | Very rare, clear reversal form |
When Does a Morning Star or Evening Star Confirm, and When Does It Not?
Unlike the doji, the pattern already contains its confirmation: the third candle is the countermove that you first have to wait for with the doji. Many traders therefore enter at the close of the third candle. More cautious traders also wait to see whether the next candle holds the direction.
The pattern is invalidated when the price closes beyond the star: below its low for the morning star, above its high for the evening star. The old trend has then prevailed, and the third candle was only a brief countermove. The following chart shows exactly that.
In the false-signal chart, the price rises in several waves after a pullback at the start. Then an evening star forms: the first candle rises from 108.70 to 109.95; its body is almost three times as large as the usual bodies before it. The star opens at 109.95, reaches 110.45, and closes at 110.12. The third candle falls to 109.04 and closes at 109.15, below the middle of the first body at roughly 109.33. The next candle closes at 109.70, the one after it at 110.60, above the high of the star. With that, buyers have prevailed; the last candle in the chart closes at 112.70.
Example of Entry, Stop, and Target
A planned trade with the morning star buys at the close of the third candle and places the stop below the low of the star. That is where sellers made their last push; if the price falls below it, the idea is disproven. The target is the swing high where the downtrend began.
In the chart, the price falls from the swing high at 105.30 in several waves. Then a long bearish candle follows from 101.75 to 100.45; its body is 1.30 points long, roughly three and a half times as large as the usual bodies before it. The star opens at 100.45, falls to 99.92, and closes at 100.28; its body measures only 0.17 points. The third candle rises to 101.58 and closes at 101.45, above the middle of the first body at 101.10. A trader buys at the close of 101.45. The stop is just below the low of the star, at 99.82; the risk is 1.63 points. The target is the swing high at 105.30; the price reaches it after 11 candles, which is 3.85 points. This gives a risk/reward ratio of roughly 1:2.4. Because the entry comes only after the long third candle, it already lies a good distance above the low of the star; the risk is therefore larger than with an entry right at the star.
How Do You Use the Morning Star and Evening Star Across Multiple Timeframes?
Star patterns form on every timeframe. Only a look at the higher timeframes shows whether a pattern starts a real turn or merely ends a correction.
For example, if the price is rising on the 4h and 1d charts while it pulls back for a few hours on the 1h chart, a morning star on the 1h chart can signal the end of this pullback; the pattern then points in the direction of the main move. An evening star against the trend of the higher timeframes, by contrast, is more likely to announce a short correction than a turn. A pattern made of three daily candles spans three trading days and therefore carries more weight than one made of three hourly candles. On the signal page and in the cockpit, you can see which way the trend is currently pointing on each of the eight timeframes.
How Do News and Scheduled Events Affect the Morning Star and Evening Star?
Because the pattern spans three periods, a scheduled event easily falls within it on short timeframes. If the price jumps sharply in one direction after a release, a random sequence of candles can become a star without sentiment having gradually turned: the long third candle is then the reaction to a number.
Conversely, a release can quickly invalidate a completed pattern. Check the economic calendar, therefore, to see whether an interest rate decision or a labor market report falls within the three candles or is coming up shortly. The news situation in the cockpit also shows whether the reports on the pair tend to point in the direction of the pattern or against it.
How Do You Use the Morning Star and Evening Star in the Four Trading Styles?
How much a star counts in a trading plan depends strongly on the timeframe. On the 15m chart, the whole pattern is complete after three quarters of an hour; on the 1d chart, after three days.
The Morning Star and Evening Star in Scalping
In scalping on the 15m and 30m charts, star patterns form often, many of them from random fluctuations in quiet phases. Scalpers therefore pay attention to a star only if a clear, fast move ran before it and it stands at a place that also matters on the 1h or 2h chart, for example at the high or low of the current session. The trade is entered at the close of the third candle, with the stop beyond the star. Because the third candle is long, the entry often already lies far from the stop; with a target of only a few points, this quickly worsens the risk/reward ratio. Some scalpers therefore wait for a small pullback into the third candle and enter there. Spread and slippage weigh heavily at this level. Trading takes place mainly in the liquid London and New York sessions; in the Asian session, thin trading produces many patterns that mean little. The holding period is a few minutes to a few hours.
The Morning Star and Evening Star in Day Trading
In day trading on the 1h and 2h charts, a star spans three to six hours. It often marks the end of a move within the day, for example when the price reaches the previous day's high or low and turns there. For the larger direction, day traders consult the 4h or 8h chart: a star against its trend is more likely to announce a correction than a turn. The trade is taken after the close of the third candle, with the stop beyond the star. Because all positions are closed by the end of the trading day, day traders check before entering whether enough time remains to reach the target; a star late in the evening leaves little room for that. The target is usually the day's last swing high or swing low. If the first candle coincides exactly with a release, it is often more a reaction to the news than the climax of a trend; day traders then check the economic calendar to see whether the pattern would still hold without the scheduled event. A pattern that stops a breakout shortly after a session begins carries more weight, because enough market participants then stand behind the countermove.
The Morning Star and Evening Star in Swing Trading
In swing trading on the 4h and 8h charts, traders hold positions for days to a few weeks. A star here spans twelve hours to a full day and, at the end of a rise or decline lasting several days, is a hint to be taken seriously, especially at a zone on the 12h or 1d chart. Swing traders pay attention to how the first candle fits into the move: if it is the longest candle of the entire trend, this often points to a final overextension. Entry comes at the close of the third candle or on a pullback into its body; the stop lies beyond the star and, if a zone lies just behind it, also beyond that zone. Swing traders often take as their target the swing high or swing low where the move before the pattern began, as in the example above. Because positions run overnight and often over the weekend, swing traders allow for gaps at the start of the week in currencies, while cryptocurrencies trade without a break. For many, an evening star against an open long position is a reason to tighten the stop or to secure part of the profits.
The Morning Star and Evening Star in Position Trading
In position trading on the 12h and 1d charts, trades last weeks to months. A star made of three daily candles after a trend lasting several weeks is a reason to review the situation thoroughly here, but rarely a reason to enter on its own. Since FinScans has no timeframe higher than 1d, position traders place the pattern in context using the course of the 1d chart over several months: does it stand at a high or low that the market has already failed to overcome before? On the 12h chart, the pattern spans a day and a half; there it is more of a preliminary stage that should be confirmed on the 1d chart. A morning doji star or evening doji star on the daily chart deserves particular attention, because an entire trading day without a winner lies between the two long candles. For open positions, a star against one's own direction is a reason to trail the stop. Position traders usually open new positions against the old trend only once further daily candles confirm the turn and interest rate policy and economic data support it. Because three daily candles together have a large range, a stop beyond the star lies far away; this calls for a correspondingly smaller position size.
| Style | Timeframe | Higher timeframe | Holding period | Duration of the pattern | Watch the star especially |
|---|---|---|---|---|---|
| Scalping | 15m, 30m | 1h, 2h | Minutes to a few hours | 45 minutes to 1.5 hours | after a fast move at the session high or low |
| Day trading | 1h, 2h | 4h, 8h | Within the day | 3 to 6 hours | at the previous day's high or low |
| Swing | 4h, 8h | 12h, 1d | Days to a few weeks | 12 hours to 1 day | after a long trend candle at a zone |
| Position | 12h, 1d | 1d over several months | Weeks to months | 1.5 to 3 days | at the end of a trend lasting several weeks |
Morning Star or Bullish Engulfing?
Both are bullish reversal patterns after a downtrend, and both end with a long bullish candle. The difference lies in the number of candles and in what the last candle has to achieve.
With the engulfing pattern, the body of the second candle completely encloses the body of the first; the turn happens within a single period. With the morning star, a star that shows the pause lies between the long bearish and the long bullish candle. The third candle does not have to enclose the first, only reach deep into its body. If the star is bearish, the third candle often completely encloses its small body; star and third candle then also form a bullish engulfing. For the evening star and the bearish engulfing, everything applies in mirror image.
| Feature | Morning star | Bullish engulfing |
|---|---|---|
| Candles | Three | Two |
| Middle candle | Small body or doji below the first candle | None |
| Last candle | Closes above the middle of the first candle | Body encloses the body of the first candle |
| Stop | Below the low of the star | Below the low of the two candles |
| Sequence | Turn over three periods with a pause | Turn within one period |
| Bearish counterpart | Evening star | Bearish engulfing |
What Mistakes Are Common with the Morning Star and Evening Star?
Most mistakes happen because the pattern already looks complete before the third candle has closed, or because the surroundings do not fit.
- Trading before the close of the third candle: only the close shows whether it really reaches deep into the first body; until then, there is only a small candle after a long one.
- Overlooking the trend before it: without a preceding downtrend or uptrend, there is nothing to reverse; three candles of this shape in the middle of a sideways phase say little.
- Accepting a weak third candle: if it closes only just inside the first body, the other side has recovered little.
- Setting the stop too tight: the sensible stop lies beyond the star and often far from the entry; anyone who does not adjust the position size goes against sound risk management.
- Overlooking the location: a star at an important support or resistance carries more weight than one in the middle of a move.
How Star Pattern Triggers Are Named in FinScans Signals
On the signal page, these triggers appear in the trigger table, each with an arrow: ▲ means FinScans counts the trigger on the bullish side, ▼ on the bearish side. Four names belong to this page:
- “Morning Star” (▲): A long bearish candle, below it a star with a small body, then a long bullish candle.
- “Evening Star” (▼): A long bullish candle, above it a star with a small body, then a long bearish candle.
- “Morning Doji Star” (▲): Like the morning star; the middle candle is a doji.
- “Evening Doji Star” (▼): Like the evening star; the middle candle is a doji.
The trigger belongs to the third candle, because the pattern is complete only with its close. Unlike many single-candle triggers, these four almost always appear in signals of their own direction. The signal page shows no trigger named “Abandoned Baby”. “Bullish Doji Star” and “Bearish Doji Star” describe only the doji after a long candle, without the third candle; like “Collapsing Doji Star”, they belong to the page about the doji. The names describe the sequence of the three candles; whether a trend really ran before it is something you check on the chart.
The signal page shows no class for candlestick patterns. A star trigger almost never stands alone: FinScans combines it with the other triggers of the same signal into an overall direction. Whether the signal runs with or against the larger move is shown by the trend across the eight timeframes and the overall assessment.
The following block shows current data on these triggers. The hit rate should always be read relative to the average: if it is above, the trigger has a statistical edge; if it is below, it is better used as a hint than as the sole reason to enter. The rates can vary considerably by trading style, because there is more noise on short timeframes. The distances to target and stop also play a role: a tight stop is hit more often than a wide one, a distant target less often than a near one.
What the Machine Reports, What You Check Yourself
On the signal page, these triggers appear for forex and crypto pairs; their name describes the sequence of the three candles, not their position in the larger picture. Whether a star stands at a sensible place and offers a viable setup is something you decide yourself in hybrid trading.
- The machine reports, for example, “Morning Star” or “Evening Doji Star”; you check on the chart whether a clear trend ran before the pattern and how long the first candle is compared with the candles before it.
- The signal page shows the trigger's arrow; you check how deep the third candle reaches into the body of the first and how clearly the star sets itself apart.
- The machine provides the trend across eight timeframes; you check whether the star stands at a zone on the higher chart.
- The data block shows the hit rate so far; you check the economic calendar to see whether a release fell within the three candles.
- The signal page gives target and stop; you measure the distance from the entry to beyond the star and work out whether the risk/reward ratio fits your risk management.
Frequently asked questions
Is the Morning Star a Buy Signal?
It is a hint of a possible turn upward, not an order to buy. It carries weight only after a recognizable downtrend and with a third candle that reaches deep into the body of the first. Whether a purchase is worthwhile also depends on the location on the chart, the trend on the higher timeframes, and the distance to the stop.
Does a Morning Star Need a Price Gap?
In the textbook, the star sits with a gap below the first body. In forex and crypto trading, each candle begins at the close of the previous one, so this gap hardly ever occurs there. It is enough that the body of the star does not reach into the body of the first candle and that the third candle closes clearly above it.
What Color Must the Star Be?
The color of the star does not matter; what matters is that its body is small. Some traders regard a star that already closes against the old trend as somewhat stronger, because the countermove begins earlier. If the star is a doji, the pattern is called a morning doji star or evening doji star.
How Far Must the Third Candle Reach into the First Body?
There is no fixed limit. As a rule of thumb, it closes at least beyond the middle of the first body: above it for the morning star, below it for the evening star. The deeper it reaches, the more of the first candle's move has been recovered and the clearer the change.
Sources
- Nison, Steve: Japanese Candlestick Charting Techniques, New York Institute of Finance, 1991.
- Bulkowski, Thomas N.: Encyclopedia of Candlestick Charts, John Wiley & Sons, 2008.
- Morris, Gregory L.: Candlestick Charting Explained, McGraw-Hill, 2006.