How to trade MORNING STAR/DOJI?
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Let's understand with example of #banknifty.
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#StockMarket #StockMarketindia #SGXNIFTY
@kuttrapali26 @chartmojo @vivbajaj @Stock_Precision
A thread🧵
Let's understand with example of #banknifty.
♻️Retweet for max reach.
#StockMarket #StockMarketindia #SGXNIFTY
@kuttrapali26 @chartmojo @vivbajaj @Stock_Precision
1⃣What is MORNING STAR?
🔸It is a bullish three-candlestick pattern signifying a potential bottom.
It warns of weakness in a downtrend that could potentially lead to a trend reversal. The morning star consists of three candlesticks with the middle candlestick forming a star.
🔸It is a bullish three-candlestick pattern signifying a potential bottom.
It warns of weakness in a downtrend that could potentially lead to a trend reversal. The morning star consists of three candlesticks with the middle candlestick forming a star.
2⃣What happens after morning star pattern?
🔸The pattern is formed at the bottom of a downtrend and it gives a warning sign that the ongoing downtrend is going to reverse.
After analyzing the formation of the pattern one should seek confirmation using some technical indicators.
🔸The pattern is formed at the bottom of a downtrend and it gives a warning sign that the ongoing downtrend is going to reverse.
After analyzing the formation of the pattern one should seek confirmation using some technical indicators.
3⃣The Diff. Between a Morning Star & Morning star Doji
🔸The MS comes in a minor variation. When the price action is flat in the middle candle, it forms a doji with no long wicks.
The MS doji shows the market indecision more clearly than a MS with a thicker middle candle.
🔸The MS comes in a minor variation. When the price action is flat in the middle candle, it forms a doji with no long wicks.
The MS doji shows the market indecision more clearly than a MS with a thicker middle candle.
4⃣How to trade when you see the Morning Star pattern?
1. Confirm the downtrend.
2. Find out the morning star pattern.
3. Entry, take profit and stop loss: Enter the trade when the third green candle closes & place SL below the middle candle. Take profit near next supply zone.
1. Confirm the downtrend.
2. Find out the morning star pattern.
3. Entry, take profit and stop loss: Enter the trade when the third green candle closes & place SL below the middle candle. Take profit near next supply zone.
5⃣Variation in Entry of Morning star
🔸VARIATION 1:
When 3rd green candle breaks 1st candle's high:
It shows the power of bulls that they're more comfortable/powerful at those levels.
✅ENTRY: After breaching of 1st candle's high
❌SL: Low of 2nd candle
🔸VARIATION 1:
When 3rd green candle breaks 1st candle's high:
It shows the power of bulls that they're more comfortable/powerful at those levels.
✅ENTRY: After breaching of 1st candle's high
❌SL: Low of 2nd candle
🔸VARIATION 2:
When 3rd green candle pierce 1st candle by more than 50%:
✅ENTRY: Above high of 3rd candle.
❌SL: Low of 2nd candle.
When 3rd green candle pierce 1st candle by more than 50%:
✅ENTRY: Above high of 3rd candle.
❌SL: Low of 2nd candle.
6⃣When and where Morning star works well?
1. Volume of 3rd candle is more than vol of 1st candle.
2. Formed at support zone.
3. Formed after oversold market.
4. At indicator's support.
1. Volume of 3rd candle is more than vol of 1st candle.
2. Formed at support zone.
3. Formed after oversold market.
4. At indicator's support.
7⃣Morning star with multiple confirmations and indicators.
1🔸RSI
If RSI +ve div is seen with morning star/doji pattern then the pattern becomes more reliable to trade.
Here in the pic below, you can see +ve RSI div + Morning star / doji pattern.
1🔸RSI
If RSI +ve div is seen with morning star/doji pattern then the pattern becomes more reliable to trade.
Here in the pic below, you can see +ve RSI div + Morning star / doji pattern.
2🔸EMA
If we find Morning star/doji taking support on EMA then the trade becomes more confirmed.
This setup is more reliable for INTRADAY purpose.
Here in the pic below, you can see EMA + Morning star / doji pattern.
Scrip: BANKNIFTY
TF: 15mins
EMA: 100
If we find Morning star/doji taking support on EMA then the trade becomes more confirmed.
This setup is more reliable for INTRADAY purpose.
Here in the pic below, you can see EMA + Morning star / doji pattern.
Scrip: BANKNIFTY
TF: 15mins
EMA: 100
3🔸BOLIINGER BAND
When Morning star/doji takes support on lower band of Bollinger band, here's one more confirmation to trade with this reversal pattern.
Here in the pic below, you can see Bollinger band + Morning star / doji pattern.
When Morning star/doji takes support on lower band of Bollinger band, here's one more confirmation to trade with this reversal pattern.
Here in the pic below, you can see Bollinger band + Morning star / doji pattern.
4🔸MACD
If MACD +ve div is seen with morning star/doji pattern then the pattern becomes more reliable to trade.
Here in the pic below, you can see +ve MACD div with bullish crossover + Morning star / doji pattern.
If MACD +ve div is seen with morning star/doji pattern then the pattern becomes more reliable to trade.
Here in the pic below, you can see +ve MACD div with bullish crossover + Morning star / doji pattern.
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