Tri-Star Pattern
The Tri-Star pattern is a quite accurate pattern. It’s hardly used by traders. If the tri-star pattern is used in combination with other indicators or oscillators then a trader can expect a good trade. The bullish tri-star indicates the end of the current bear trend and the arrival of price reversal. Whereas the bearish tri-star indicates the end of the current bull trend and the arrival of price reversal.
In This Article
What is the Tri-Star Pattern?
How to analyze a chart using Tri-Star Pattern?
Category – Trend/Momentum
Type – Lagging
What is the Tri-Star Pattern?
A Tri-Star pattern is a three-line candlestick pattern that can signal the probable reversal of the current trend which can be bullish or bearish. The pattern formation takes place when three consecutive Doji candlesticks appear at the end of a prolonged trend. It’s very rare to see this kind of pattern.
There are two variants of the tri-star pattern. They are bullish tri-star and bearish tri-star.
The bullish tri-star candlestick pattern is found during a downtrend in the market and it forecasts the upcoming reversal of the present downtrend in the market.
The bearish tri-star candlestick pattern is a bearish reversal pattern which forecasts the upcoming reversal of the present uptrend in the market.
How to analyze a chart using Tri-Star Pattern?
The tri-star pattern is categorized into two variants i.e. bullish tri-star pattern and bearish tri-star pattern. We will try to learn chart analysis of both.
Bullish Tri-Star Pattern
Chart 1:-
Source:- https://www.indiacharts.com/stock-market/tristar-candlestick-pattern-how-to-trade/
The pattern has three Doji candlesticks. The pattern consists of a middle Doji candle formed a bit below the other two candles which gives the pattern a V-shape look. The bullish tristar pattern is marked in a black circle. The middle Doji formulates the lowermost point of the pattern. As you can see due to price reversal, the middle Doji is formed where the bearish and bullish trends meet.
You can analyse from the chart that the bearish pattern comes to an end with the middle Doji. This is because the price reaches the lowest point in the candle. From the third candle onwards bullish reversal starts.
Chart 2:-
Image Source:- https://www.indiacharts.com/stock-market/tristar-candlestick-pattern-how-to-trade/
The bearish tri-star pattern consists of three Doji Candlesticks. The formulation of the middle Doji candle takes place above the other two candles of the pattern which gives it an inverted V shape look. The bearish tri-star pattern is marked in a black circle. The middle Doji is the uppermost price of the pattern. As price reversal occurs so the middle Doji is the portion where the bullish trend and bearish trend meet.
The chart reflects the end of a bullish pattern with middle Doji. This is because the price reaches the highest point in the candle. The bearish reversal starts from the third candle.
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