Candle Decoder
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More Reversal Signals

The spinning top, and the three-candle morning star / evening star reversal. This lesson covers: What you'll learn, The spinning top, Tug of war, The morning star, Name it, The evening star, The mirror image, Put it together.

Going deeper

More on more reversal signals

Three-candle patterns like the morning and evening star are more demanding than single-candle signals precisely because they require a sequence: exhaustion, indecision, then a decisive move the other way.

That sequence is the useful part. It describes a handover of control taking place over time rather than in one candle, which is generally what a genuine turn looks like.

Common mistakes3
  • Calling any three candles a star pattern. The middle candle must show genuine indecision, and the third must close meaningfully into the first.
  • Looking for reversal patterns while ignoring whether there is anything to reverse. These need a prior trend to be meaningful.
  • Treating the pattern as the trade. It is one input to a read, not an entry in itself.
From experience2
  • Check where the third candle closes. Deep into the first candle's body is a much stronger signal than a marginal close.
  • Reversal patterns forming into a level are worth attention; the same pattern in open space usually is not.
Questions people ask2

How is a morning star different from a bullish engulfing?

An engulfing pattern is two candles and immediate. A morning star is three and shows exhaustion, then pause, then reversal — a slower handover.

Does the middle candle have to gap?

Classical definitions require a gap, which suits stocks. On a nearly 24-hour instrument like US30 gaps are rare, so the practical requirement is a small indecisive body.