Trading Using Bullish Morning Star & Confirmation analysis
What is a Bullish Morning Star Candlestick Pattern?
The Bullish Morning Star candlestick pattern is one of the most accurate candlestick patterns. You can use the candlestick pattern without the need for confirmation, but it would be better if you wait for confirmation in its use. The bullish morning star candlestick pattern is formed by three candlesticks, then this candlestick bears a resemblance to the bullish abandoned body which we discussed earlier. However, this candlestick has a difference, the difference lies in the shape of the second candlestick.
The bullish morning star candlestick actually tells us that it is very likely that the price will rise after that. In this case, we can start buying right after the bullish morning star candlestick pattern is formed. To understand the bullish morning star candlestick pattern, I have included the picture below.
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| Bullish Morning Star |
From the picture above, we can see together that three candlesticks have a bullish morning star pattern. To make it easier to understand, let's assume together that this candlestick pattern is formed in the daily timeframe. After a long period of price decline, on the first day, there we see a candlestick form with long red trunks. This means telling us that bearish candlesticks are still dominating the market.
In this case, it is predicted that the price is moving down, but luckily on the second day, a blue candlestick is formed which has a short stem with a gap de below from the candlestick on the first day. In this case, it tells us, at the beginning of the second day. The bearish candlestick was still very dominant in the beginning so that it could push the bullish candlestick, which is indicated by the gap and the second day's low opening price.
However, it seems that the strength of the bullish candlestick has started to show, although it doesn't look that big, and in the end, it can balance the bearish candlestick. We can see this in the blue candlestick rod. We need to remember again that the chandelier on the second day does not have to be blue, meaning red is not a problem either, as long as the stem is short.
If there is a red candlestick with a short bar, this means that the bearish candlestick is starting to weaken. So that's where the bullish candlestick has started to gain strength as if the short candlestick has a blue bar, that's the only difference. So far, we can expect that the price will start rising soon, apparently, our expectation was confirmed by the candlestick on the third day.
On the third day, it turns out that a blue candlestick has a long stem with a fairly significant upward gap. This means that this candlestick has informed us that the bullish candlestick has dominated the market, and has started to advance further into the territory of the previous bearish candlestick. So in conclusion, the prediction of an uptrend on the second day has been confirmed. And most likely the price will continue to move up, this is the right time for us to make a purchase (BUY).
As I said before, we can make purchases without waiting for confirmation. However, if you want this certainty to be more certain and reduce the risk lower, we must wait for another confirmation. Maybe some of you are asking, what confirmation do we need right now? For confirmation, we can use the next candlestick as a reference or purchase confirmation. We are waiting for the blue candlestick which really shows the strength of the bullish candlestick that has dominated.
Bullish Morning Star confirm
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| Bullish Morning Star Confirm |
As we can see in the image above, there I have added a confirmation line drawing and a long blue candlestick. There we can see that the closing price on the fourth day was above the opening price of the first day. This means that the bullish candlestick has succeeded in dominating and breaking through the bearish candlestick.
Prices are predicted to continue to move up in the long term. This is a sign that a strong bullish trend has started, and this means that it is a good time to start buying if we use a confirmation. We can take very large profits, while we have reduced very small risks. In essence, we can assume that the morning star bullish candlestick pattern is the basis of a downtrend and the beginning of an uptrend.