For a better understanding of this article, you should already know what Japanese Candlesticks are and all their features; for this reason, we suggest you to read this introductory article to Japanese Candlesticks: Japanese Candlestick Chart ( So that you can understand also the Ratings given to the Candlestick Patterns for the “quality” of the signal and for their frequency to “appear” on Charts).
Let’s analyse now the following Candlestick Pattern: “Three Stars in the North”.
– Normally it should be a signal of reversal of the current Trend.
– You can find it in the variants: South and North, depending on the Trend in which is located.
Three Stars in the North
– It occurs during an Uptrend; confirmation is required by the candles that follow the Pattern.
– The First Candle is long and white; it has a long Upper Shadow and no Lower Shadow.
– The Second Candle is white, is shorter than the First Candle; it has the High below the High of the First Candle.
– The Third Candle is short and white, it hasn’t an Upper and Lower Shadows (It’s a Marubozu); it has the Close within the High-Low Range of the Second Candle.