The Tri-Star candlestick patterns have a bullish and bearish version, this write-up will explain the bearish version.
The bearish Tri Star candlestick pattern is a bearish reversal pattern composed of three candles signaling the reversal of an uptrend.
Each of the Tri Star’s candles are Doji’s. Because it is extremely rare to see this candlestick pattern on your charts, when you do happen to come across it, it should not be ignored.
A few criteria must be met in order for the Tri Star pattern to be considered a valid bearish reversal signal:
The pattern occurs within a dominant uptrend.
Three Doji’s in a row, each one should have very little to no full bodies.
The second Doji’s body should gap above the first Doji, while the third Doji’s body should gap down,
The third Doji should be positioned centrally between the first and second Doji.
It is perfectly fine for the Doji wicks to overlap. All that matters is if the second Doji’s body, the open and close, gaps away from the first and third Doji’s open and close.
The first Doji signals indecision between buyers and sellers. The second Doji is a clear indication that the markets current direction is fading. The third and final Doji is confirmation that the current uptrend is over. Bears will soon take control.
All-in-all, the Tri Star candle pattern indicates a massive amount of indecision in the market. Even though Bulkowski’s testing showed the bearish Tri Star candlestick pattern to have a measly 52% accuracy rate.