This pattern morning star is instrumental in the stock market. It has the power to reverse the call. This is a unique pattern in the whole stock market. It has so much ability inside it to rotate the entire market. But before going into it. We need to know a lot about how it is made.
Because before we know anything, we like to know what is inside this thing, due to which it works so much. Morningstar is a trendy pattern and very unique. Star is not difficult to find; you have to work hard. And only once you have a look can you quickly see that pattern on the chart.
If you have worked very hard, you can find it in just a second. Now let’s talk about how it is forming. Morning Star is continuously included in support or when the market is taking a pullback. Before becoming a morning star, we need a clear cut-down train in the market, and there should be continuous selling.
If there is no downtrend and selling in the market, then it will not work in any way because we need continuous selling and downtrend before any pattern is formed.
Heavy losses have to be in the curve in this. Because patterns are also formed in the side wedge market but are of no use because there is a lot of demand and supply. Before performing, we also need to know a good momentum that is continuously downward,
How is It Performed?
So let’s talk about how the star forms; which candles do we need behind it, which help to make it a morning star or strengthen the morning star? To become a morning star, we need three red candles. And those candles should not break the high of any previous candles. This is the reversal chart pattern in the stock market.
If any candle brakes the high of its previous candle, then that pattern will fail. And it should be performed in the support area also. Now after making three candles. A new candle should open at the bottom with a small gap. And that candle must be small. And the body of that candle should be the same shadow up and down of that candle.
If its shadow doesn’t match the candle’s body, it’s not called a morning star. It is essential to be equal to their shadow body. After the candle is formed, we also need a big green-colored candle, which should open slightly upwards.
And that candle which was made at the back of the red color candle should be entirely covered inside itself; that is, it should engulf inside the previous red candle. It is the Most Useful And No 1 Pattern IN the Stock Market
How To Place Entry
After all the patterns are made, it comes to how we enter inside, i.e., when we have to buy. To enter the trade, we must first see how big that previous candle is and how big our stop loss is coming. If our stop loss is too significant, we must ignore that trade.
And our stop loss is coming small, so we have to enter that trade. Stock Market is Very cheeping if you do it properly.
How To Set Your Stop Loss OR Take Profit
How do we decide what is our stop loss and target on the morning star, what is our stop loss, what is our entry, and what will our exit on the morning star? Morningstar is a popular pattern. Before trading, we need to see how significant our stop loss is. If our stop loss is high, we will ignore that trade, and if our stop loss is slight, then we will enter that trade on the morning star.
Now it comes to how we have to take the trade. We have to trade at the high of the candle that we close above the morning star, and we have to place our stop loss with a little buffering from the shadow of the morning star, and we have to target at least between our entry and stop loss We have to target double of that difference. This is our entry and exit formula.
Follow Us On Instagram – Click Here
Subscribe to Our Channel – Click here