Bullish Morning Doji Star

Bullish Morning Doji Star
Direction: Bullish
Type: Reversal
Reliability: Strong
After an established down trending day-one is a long red day
Day-two is a Doji where the open and close are equal.
Day-three is a blue day

Bullish Morning Doji Stars are a rare reversal pattern that offers one of the strongest bullish reversal signals in the Forex Market. Morning Star formations are characterized by a continuation of a bearish trend followed by a Doji, reflecting uncertainty in the strength of trend.

Up to day two we actually have a Doji Star formation, a moderate strength bullish pattern. After the day of indecision, the trend reversal is confirmed when a rally creates the large bullish candle. The stronger the move up on day-three, the stronger the reversal signal. Watch for additional bullish price action in the next few days.

In FX this formation practically identical to the bullish Abandoned baby. In non-FX markets Candlestick analysts traditionally look for gaps to signal the strength of the Morning Doji Star pattern. Gaps between the close price and open price are very common outside efficient FX markets, since exchanges are traditionally limited to very short trading periods. Because Foreign Exchange trades 24 hours, gaps are very uncommon and need to be ignored in identifying Morning Star patterns.

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