In the IQ Option financial trading world, there are many types of trading including Price Action, Reverse, etc. Each trading strategy has a different method of opening an order. And a strategy, which can be referred to as trading under the Japanese candlestick patterns, is also very effective. In this article, I will introduce the trading strategy using the Morning Star Japanese candlestick pattern. Thanks to it, I made a profit of $285 in 3 trading days.
- 1 What is Morning Star candlestick pattern?
- 2 Morning Star candlestick pattern meaning
- 3 The crowd psychology when Morning Star candlestick pattern appears
- 4 Variants of the Morning Star candlestick pattern
- 5 The suitable capital management method
- 6 Review on trading orders in IQ Option from May 25 to May 28, 2020
- 7 In conclusion
What is Morning Star candlestick pattern?
Morning Star is a strong reversal candlestick pattern from bearish to bullish. Most traders will find a reasonable entry point after the Morning Star appears.
The Morning Star pattern consists of 3 following candles:
1st candlestick: is a bearish candlestick with a long body.
2nd candlestick: is a small-body candle. The color does not matter (better if it is a Doji). It shows the hesitation of the market when the sellers and the buyers balance.
3rd candlestick: is a bullish candlestick with a length of at least 50% of the first candle.
Morning Star candlestick pattern meaning
The price is likely to rise when the Morning Star pattern appears. In a steady downtrend, there are consecutive bearish candlesticks with a long body. Suddenly, a small Doji candlestick shows up. It indicates that the downward momentum has slowed down.
Then, a bullish candlestick with a body of at least 50% of the length of the first bearish candlestick appears. This proves that the buyers have joined in and controlled the market, causing the price to reverse from decreasing to increasing.
The crowd psychology when Morning Star candlestick pattern appears
Here, the price has reached the bed of the market. This is a level at which in the past, the support could not go lower. Investors have chosen the support level as a point to enter the market. They think this is the best price for buying. Because the past has proved it correct and the future will be the same. It causes the buyers to ignite when the fuse is the Morning Star pattern.
Variants of the Morning Star candlestick pattern
On candlestick charts, it is rare for a standard Morning Star candlestick pattern to appear. Instead, there are different variants carrying the same meaning of a bullish reversal. All of the differences are mostly on the second candlestick, at which the market hesitates.
(A) Standard Morning Star pattern.
(B) Morning star candle with an indecisive Hammer candlestick.
(C) Morning Star candle pattern with gaps.
The suitable capital management method
According to experienced traders, the winning rate reaches 70% when trading with the Morning Star candlestick pattern. Therefore, the Classic capital management method is perfect for a combination. It helps your balance grow steadily. At the same time, risks are strictly controlled.
Review on trading orders in IQ Option from May 25 to May 28, 2020
This candlestick pattern can be used with all currency pairs to trade in IQ Option. But I only choose the 3 pairs that I know best which are EUR/USD, USD/JPY, and AUD/USD.
Reasons for opening the 1st order: The Morning Star candlestick pattern appeared in the previous support zone. The price went into the safe zone to open a HIGHER order. Opened a HIGHER order with an expiration time of 30 minutes when the pattern completely appeared.
Reasons for opening the 2nd order: A variant of the Morning Star candlestick pattern appeared when the downward momentum showed signs of exhaustion. Opened a HIGHER order with an expiration time of 25 minutes when the pattern completely appeared.
Reasons for opening the 3rd order: The Morning Star candlestick pattern appeared, which led to optimism about the bull market. Opened a HIGHER order with an expiration time of 25 minutes right when the pattern formed.
Reasons for opening the 4th order: A Morning Star candlestick pattern appeared at the support zone. Opened a HIGHER order with an expiration time of 20 minutes.
Reasons for opening the 5th order: The market moved sideways, forming a previous support zone. The Morning Star pattern appeared in the resistance zone. It was eligible to open a HIGHER order with an expiration time of 25 minutes.
Reasons for opening the 6th order: The downtrend was over and the uptrend showed up. The variant of the Morning Star pattern formed in the support zone of an uptrend. Opened a HIGHER order with an expiration time of 30 minutes when the pattern formed.
When I felt enough, I stopped and withdrew all capital and profits to my Skrill e-wallet. I do not leave too much money in the account or leave over the week. That is my own rule. Why? Because I want to know how much profit earned this week. And when the money is in my Skrill e-wallet, it then can be considered as real money.
You may have questioned the winning rate of 70% listed above. If you want to develop, you must know how to ask questions. Then, get straight to the point to find a solution. It is not difficult for me to do that, but first, you have to practice patience. If there is the right method but at the wrong time, it is also a game of luck. And luck does not stand by you forever.