17. (BEARISH TRI STAR) Bearish Candlestick Patterns - from candlesticker.com

To see the performance of the pattern in your stock exchange in the context of other stock markets please examine the table below. Find your stock market there and see how it ranks among the others. This will give you an idea about the pattern’s strength and reliability and help you in your selling decisions.

BEARISH TRI STAR

Definition

The pattern is a sequence of three Doji. The occurrence of this pattern is extremely rare, so when it occurs it should not be ignored.

Recognition Criteria

1. The market is characterized by a prevailing uptrend.
2. Three consecutive Doji are seen.
3. The second day gaps above the first and the third.

Pattern Requirements and Flexibility

The Bearish Three Star consists of three consecutive Doji, in which the second Doji gaps above the two other Doji. It is sufficient that the gap is a body gap. There is no need for a gap between shadows.

Trader’s Behavior

In the case of a Bearish Tri Star we have a market, which is in an uptrend for a long time. However, the weakening trend is probably indicated by the bodies that are becoming smaller. The first doji is a matter of concern. The second Doji clearly indicates that market is losing its direction. Finally, the third doji warns that the uptrend is over. This pattern indicates too much indecision leading to the reversal of positions.

Sell/Stop Loss Levels

The confirmation level is defined as the last close. Prices should cross below this level for confirmation.

The stop loss level is defined as the higher of the last two highs. Following the bearish signal, if prices go up instead of going down, and close or make two consecutive daily highs above the stop loss level, while no bullish pattern is detected, then the stop loss is triggered.

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