Hello, and welcome back to stock trading masterclass by wealthy education in this video, we'll take
a look at how to trade the morning star and evening star patterns, so this is a three candlestick pattern.
And essentially, what you're looking for is a candle, a smaller candle than another candle, so you
want to see a couple of gaps.
That would be the evening star and this would be the morning star.
Now the evening star happens typically at the end of an up run and Morningstar meaning price is going
to rise at the end of a pullback or a downtrend or something like that.
Now, I hope by now you understand that if you have three candlesticks and you see something like this,
you know, Wicks notwithstanding, I put a couple of weeks here just to make it look a little bit more.
Like the charts would look.
This should tell you something like, for example, if the price is falling or pulling back just a bit.
Well, there was a gap here.
So there was continued downward pressure, but the next day, because it does typically happen on the
daily charts.
There was a gap in the other direction, so this tells you that the selling has been repudiated and
once you break above this three candlestick pattern, the theory is you should go much higher.
Now you can put your stop behind this candlestick or this candlestick entirely up to you.
In that sense, it's it's kind of traded like a little miniature head and shoulders.
It's really a good way to think about it.
And that would be the Morningstar because it's going to rise.
The evening star, of course, is this one over here?
Same idea.
Small body is what you want, and the reason is because it suggests that a lot of the wherewithal of
the previous direction has run out.
So I haven't Morningstar right here on the Bargains group, you can see it's got a little bit of volume
coming into it and of course, we have the.
Support level there that had already been tested, I would say, like $58.
So that's the first thing that you should notice as to why this may had kicked off a move higher.
Furthermore, this is a sideways market, so you always want to check the stochastic oscillator in that
scenario, and you can see that we did cross there.
We did not get oversold, but we did cross.
So that's one thing that you could have looked at.
Your 50 day EMA slices right through the middle of it with your 200 day EMA underneath confirming that
we are in fact in a relatively strong uptrend.
And once we break above the top of this candlestick, this would have worked had you put your stop loss
back here.
Had you put your stop loss behind this candlestick, you may have gotten tagged right there, quite
frankly.
But since you had the 50 day EMA there, you have to feel somewhat confident in how that would have
turned out.
Now Twilio has.
What you could call basically a double evening star.
You could see a nice gap gap there, a gap there at an extreme high.
So that's very interesting.
And, you know, when you see these like double type.
Chemistry patterns that really should catch her attention.
We did pierce the top of the Bollinger Band on a high volume and then get lower on high volume.
That in and of itself should give you a bit of a heads up as to something may not be quite right.
We pulled back to the 50 day EMA, which is what you would expect as well.
And then with the Bollinger Band doing that, there's a very good chance that the RSI had gotten yes,
overbought.
And in fact, we even ended up having a bit of divergence at previous resistance.
So it all kind of tied in quite nicely there.
So you have to look a little close, but you are still formed an evening star as well right there.
Gap Gap.
Now this was a large area of ground to cover, but clearly it worked out back down to the support level
rather quickly.
So you can see that it showed signs of exhaustion as well, if you will.
Let's go ahead and put.
I'm going to take a wild guess and say that we had broken the Bollinger Bands.
Yes, before we came back, tested and failed, probably going to see something similar on the RSI.
Yes, we got overbought.
RSI kept dropping.
Why the price kept rising.
Now, I don't know that I would call that divergence, but it certainly is decoupling.
So that, of course, is an area worth paying attention to.
So with that, we have finished Module nine, which is triple candlestick patterns and have come to
the conclusion of the course.