Morning Star
A Morning Star is a three-candle bullish reversal at the bottom of a downtrend: a strong red candle, a small-bodied "star" that gaps or holds below, and a strong green candle that closes deep into the first candle's body.
What it measures
Candle 1: large red body confirming the downtrend. Candle 2: small body (doji or spinning top), ideally with a gap or at least a lower close than candle 1. Candle 3: large green body that closes above the midpoint of candle 1's body.
Parameters
| Name | Default | Range | Note |
|---|---|---|---|
| star_body_max_pct | 30 | 10–50 | Maximum body-to-range % for the middle candle. Smaller = more indecisive = stronger signal. |
| candle3_penetration | 50 | 30–100 | How far candle 3 must close into candle 1's body, as %. 50% is the classic threshold. |
How it behaves
The three-candle sequence dramatises the reversal: initiators sell (C1), momentum dies (C2), buyers reclaim (C3). Volume that expands on C3 relative to C1 is a strong confirmation of the shift.
When it misleads
In strong downtrends without a level nearby, Morning Stars often mark a two-session bounce that fails immediately. The middle candle also gets loose in real markets — many "Morning Star" scans catch patterns where the star is not really indecisive, just a slightly smaller red candle. Enforce the small-body threshold strictly.
Backtest result
Sourced backtest in preparation — we're running the rule on our own historical candles before publishing numbers we can stand behind.
FAQ
- Does the middle candle have to gap?
- In the classic Japanese definition, yes. In modern crypto and FX charts where 24-hour trading eliminates most gaps, a lower open and close is usually accepted as equivalent.
- Morning Star vs Bullish Engulfing?
- Morning Star is a three-candle pattern with an indecision middle; Engulfing is two candles with no middle. Morning Star tends to mark deeper, more durable lows; Engulfing fires more often but with more failures.
- What is a Morning Doji Star?
- A Morning Star where the middle candle is a proper doji (near-zero body). The strictest and highest-conviction version of the pattern.
Build a strategy with Morning Star
Drop the block into the Nodlow builder and backtest on real historical data.
Try it in the builder