Bullish Tri Star Pattern

by · December 31, 2009

BULLISH TRI STAR PATTERN (BTSP)
3 Dojis going down then up

Characteristics:
1. Market is on a downtrend;
2. Then there are 3 consecutive Doji; and
3. The Day 2 Doji gaps below those of Day 1 and Day 3.

Brief Explanation:
In the BTSP case, we have a market that is in a downtrend for a long time. This is shown by the real bodies that are becoming smaller. Doji 1 is a cause for concern. Doji 2 shows that the market is losing its direction. Day 3 signals that the downtrend is over. This is a case of too much indecision that leads to the reversal of positions.

Note:
1. On Day 4, a confirmation is required to ensure that the downtrend has reversed (through a white stick, a large gap up or a higher close).