Single candle patterns give hints.
Two candle patterns give signals.
Three candle patterns tell complete stories.
The Morning Star and Evening Star are among the most respected reversal patterns in technical analysis — precisely because they show an entire momentum shift playing out over three periods.
Location: Appears at the bottom of a downtrend or at major support.
Structure — three candles:
Candle 1 — Large bearish candle
Strong selling. Sellers completely in control.
Confirms the downtrend is still active going into this pattern.
Candle 2 — Small candle or Doji
Indecision. Neither buyers nor sellers dominating.
This is the turning point — the star.
Can be bullish or bearish — size matters more than color.
Ideally gaps down from candle 1 — though in 24/7 crypto markets gaps are rare.
Candle 3 — Large bullish candle
Strong buying. Buyers completely take over.
Must close well into the body of candle 1 — ideally above its midpoint.
This confirms the reversal.
What the three candles say:
Day 1: “Sellers win decisively.”
Day 2: “Nobody knows what happens next.”
Day 3: “Buyers take over completely.”
Trading Morning Star:
Strongest when:
The mirror image of the Morning Star. Appears at the top of an uptrend.
Structure — three candles:
Candle 1 — Large bullish candle
Strong buying. Buyers completely in control.
Confirms uptrend still active.
Candle 2 — Small candle or Doji
Indecision. Momentum stalling.
The star at the top.
Candle 3 — Large bearish candle
Strong selling. Sellers take complete control.
Must close well into the body of candle 1.
What the three candles say:
Day 1: “Buyers win decisively.”
Day 2: “Momentum is stalling — nobody sure what’s next.”
Day 3: “Sellers take over completely.”
Trading Evening Star:
Strongest when:
The middle candle — the star — is the most important element of both patterns.
Why:
It represents the moment of maximum uncertainty. The previous trend has lost momentum. The market does not know which direction to go next.
The third candle resolves this uncertainty — and does so decisively.
Ideal middle candle characteristics:
vs Engulfing Pattern:
Morning/Evening Star takes three candles to develop. More information — generally considered more reliable. But takes longer to form.
vs Hammer/Hanging Man:
Single candle patterns are faster to identify. Morning/Evening Star provides more confirmation through three-candle development.
vs Doji:
Doji alone requires external confirmation. Morning/Evening Star provides its own confirmation through the third candle.
Bitcoin daily chart — typical Morning Star scenario:
Day 1: Bitcoin falls $5,000 in one day. Large red candle. Sentiment extremely bearish.
Day 2: Bitcoin moves only $500 in either direction. Tiny candle — Doji. Market confused. Is the bottom in?
Day 3: Bitcoin surges $6,000. Large green candle closing well above the midpoint of Day 1’s candle. Buyers have returned with force.
This three-day sequence has appeared multiple times at Bitcoin’s major bottoms — including the famous reversal from $15,500 in late 2022.
| Pattern | Location | Signal | Key Feature |
|---|---|---|---|
| Morning Star | Bottom | Bullish reversal | Strong bullish 3rd candle |
| Evening Star | Top | Bearish reversal | Strong bearish 3rd candle |
In the next topic we will study the Spinning Top and Marubozu — two important single candle patterns that complete our candlestick education.