TRIPLE candlestick patterns!
To identify triple Japanese candlestick patterns, you need to look for specific formations that comprise three candlesticks in total.
These candlestick formations help traders determine how the price is likely to behave next.
Some three candlestick patterns are reversal patterns, which signal the end of the trend and the start of a new trend in the opposite direction.
And other three candlestick patterns are continuation patterns, which signal a pause and then the continuation of the trend.
Let’s take a look at the popular triple Japanese candlestick patterns.
Evening and Morning Stars
The Morning Star and the Evening Star are triple candlestick patterns you can usually find at the end of a trend.
They are reversal patterns that can be recognized through three characteristics.
We’ll use the Evening Star Pattern on the right as an example of what you may see:
- The first candlestick is a bullish candle, which is part of a recent uptrend.
- The second candle has a small body, showing that there could be some indecision in the market. This candle can be bullish or bearish.
- The third candlestick acts as a confirmation that a reversal is in place, as the candle closes beyond the midpoint of the first candle.