In today’s lesson, we are going to demonstrate an example of a daily chart, which ends up offering an H4 entry by producing a Morning Star in the daily chart. The Morning Star is one of the strongest bullish reversal patterns. The combination traders may make full use of it too. This is what we are going to demonstrate in today’s lesson. Let us get started.
It is a daily chart. The chart shows that the price makes a bearish move. The last candle closes within a level, where the price had a bounce earlier. The buyers may keep their eyes on the chart to get a bullish reversal to go long in the pair. Let us proceed to the next chart to find out what happens next.
The chart produces a Doji candle. It means neither the buyers nor the sellers are confident. The next candle is going to be very crucial. A bearish candle may drive the price towards the South. On the other hand, a bullish reversal candle may push the price towards the North.
The candle comes out as a bullish engulfing candle closing well above the Doji candle’s upper wick. It is a sign that the buyers may take over. Do not forget that the chart produces a Morning Star. It is one of the strongest bullish reversal patterns. The buyers on the daily chart may keep their eyes on the pair to go long with their different strategies. What do the daily-H4 combination traders do? They are to flip over to the H4 chart to find out long entry. Let us flip over to the H4 chart.
The H4 chart shows that the price heads towards the North with good bullish momentum. The price has not produced any bearish candles yet. The combination traders are to wait for the price to consolidate and produce a bullish reversal candle to go long in the pair.
The chart produces a bearish candle. The candle length suggests that the bull may show its strength in the next candle. If that happens, the buyers may find the opportunity to trigger a long entry.
The chart produces a bullish engulfing candle closing well above consolidation resistance. The buyers may trigger a long entry right after the last candle closes. Let us proceed to the next chart to find out how the entry goes.
The price heads towards the North further. Do not forget to notice the upper wick’s length. It means buyers on the minor charts have had a feast here. Most probably, it is because of the Morning Star in the daily chart. When a daily chart produces a Morning Star, it usually attracts buyers in the minor charts and vice versa. Thus, keep your eyes on the daily chart and make full use of it when it produces such a strong reversal pattern.