Bullish Tri-Star Candlestick Patterns Explained: What They Are & How To Trade Them

What Is a Bullish Tri-Star Candlestick Pattern?

A bullish tri-star is a bullish reversal formation.  They occur during downtrends and consist of 1) a doji candlestick, 2) a doji candlestick preceded by a gap down, and 3) a doji candlestick preceded by a gap up.

It is the bullish version of the tri-star pattern, and therefore the opposite of the bearish tri-star pattern.  It is also similar to the bullish abandoned baby, morning star, and morning doji star patterns.

Of course, no candlestick pattern guarantees a particular outcome.  They are more like suggestions than promises.

So, what do bullish tri-star patterns really tell you?

What Bullish Tri-Star Patterns Mean

Unlike some patterns, English speakers do not use the Japanese name for this one.

Instead, the term “tri-star” reflects the nature of the pattern, as doji (and other short-line) candles are often referred to as stars.  While this is easier to remember than most pattern names, it doesn’t provide much insight into how the pattern works.

In trading terms:

• First Period – The price opens and closes at the same figure.
• Pre/Post-Market Trading – The price decreases.
• Second Period – The price opens and closes at the same figure.
• Pre/Post-Market Trading – The price increases.
• Third Period – The price opens and closes at the same figure.

This threatens the ongoing downtrend and creates several decision zones that are likely to play a major role in determining trend direction.  If sellers cannot push price back below the formation, it may lead to a bullish reversal and subsequent uptrend.

Figuratively, bullish tri-stars indicate that the trend may have reached a dead end.

How To Recognize Bullish Tri-Star Candlestick Patterns

Patterns are attractive partly because they stand out.

To the untrained eye, they may mean nothing.  But to those with experience, they are something like a beacon.  They draw your attention to a specific segment of price action, encouraging you to look more closely.

To gain this insight, all you need to do is learn the rules and practice finding them on the charts.

By definition, a bullish tri-star pattern has several requirements.

• It must appear during a general downtrend.
• The first candle must be a doji candlestick.
• The second candle must be a doji candlestick.
• The second candle must open with a gap down.
• The third candle must be a doji candlestick.
• The third candle must open with a gap up.

As you can see, each candlestick has its own rules.

However, some exceptions may be acceptable.

• Not all of the candles necessarily have to be doji, as long as they are all short candles with gaps between them.
• The third candle doesn’t necessarily have to gap up, as long as its lower wick does not exceed the lower wick of the second candle.

You may find better results by stretching some of these criteria (or even adding your own).  For instance, your analysis may reveal that tri-star patterns with larger gaps perform more reliably than those with smaller gaps.  Or, you may find the opposite.

Technically, these variations may fall more accurately under other candlestick reversal patterns, like the abandoned baby.

This is okay though, as implication supersedes classification.  And similar patterns usually have similar implications (though not always).

Yet, that does not mean that these standards are wholly irrelevant.  In fact, certain ones are definitely mandatory, such as the middle candle being a doji that is lower than the other two.  It just means that deeper examination may help you identify more and/or better trading opportunities.

Ultimately, how seriously you take each of these guidelines is up to you.  Don’t forget that the purpose of analyzing candlestick patterns is to interpret underlying price action.  Your pattern labeling skills are less important.

To this end, you need to understand where they fit.

Where Bullish Tri-Stars Fit in the Chart Narrative

The markets are often described as a battle between the bulls and the bears.

Bullish tri-star patterns show that neither side gained any ground on candle one, the bears made some headway between candles one and two, neither side gained any ground on candle two, the bulls pushed back between candles two and three, and neither side gained any ground on candle three.

On the chart, it looks like an arrow pointing down.

In the short-term, it amounts to a veritable standoff.

The question for traders:

“Is this just a short stumbling block in the downtrend or a harbinger of full-on bullish reversal?”

To answer that question, you’ll need more than an understanding of Japanese candlesticks and candlestick patterns.  You’ll want to evaluate both within the context of longer-term chart patterns as well as trend and price levels.  You’ll also want to make use of your own chart markup and indicators.

Explore the history of your preferred asset(s) with respect to tri-star candlestick patterns and apply your findings to your own trading style.

The more thorough your technical analysis, the more clear the story in the charts becomes.

How To Trade Bullish Tri-Star Candle Patterns

Bullish reversal patterns are great places to enter longs or exit shorts, especially when you see them coming.

As such, bullish tri-star candle patterns serve as easy-to-spot signs of potential changes from bearish to bullish momentum.  They may even lead to cycle-ending bottoms.

In most cases, you can assign greater weight to multi-stick patterns than single candles because they provide more information over a longer duration.  However, you should wait for all candles to close before making any decisions.  Otherwise, there is a good chance that you’ll get caught in a fake out.

Additionally, there are a few other things you should consider before trading candlestick patterns.

First and foremost, they are never a “sure thing.”  According to Bulkowski’s Encyclopedia of Candlestick Patterns, bullish tri-stars have a hit rate of 60% (while bearish tri-stars have a hit rate of 52%).  Sure, that is pretty decent/high but definitely not a certainty.

What’s more, candlestick patterns do not have uniform price targets or measured moves like chart patterns do.  That makes position management trickier.

Plus, failed reversal patterns often lead to continuation or consolidation.  Thus, you’d be wise to seek additional confirmation factors to increase your odds of a successful trade.

Some of these include:

• Volume – Reversals are often accompanied by elevated trading volume.  For tri-star patterns, you want to see a spike on the second (or shortly after the final candle).
• Price Formations – Bullish reversal patterns that form just above important support levels tend to be more reliable.  They also reinforce the strength of these levels.
• Oscillator Shift – Oscillating indicators like the RSI or stochastics are commonly used to identify reversals by analyzing slope, percentile, and/or divergence.

The more corroborating elements are present, the more confident you can be about the strength of a bullish tri-star reversal signal.

Even so, it would be difficult to form a successful trading strategy built around any single candlestick pattern.  There simply isn’t enough there to develop a strong edge.  It would still be suboptimal with an expert understanding of trading math, order execution, market psychology, risk management, options, and automation.

In essence, tri-star patterns are more useful idea givers than trade makers.

Better yet, you’ll probably find more success building your strategy around other tools and using candlestick patterns as the final point of confirmation.

Other Candlestick Pattern Types

There are many bullish reversal candlestick patterns.

The bullish tri-star is only one.

Likewise, there are many bearish reversal candlestick patterns.  Not to mention, you have bullish continuation candlestick patterns and bearish continuation candlestick patterns.

For most traders though, tackling all candlestick patterns at once may be the best learning path.

• Abandoned Baby – Bearish | Bullish
• Breakaway – Bearish | Bullish
• Counterattack Lines – Bearish | Bullish
• Doji Star – Evening | Morning
• Engulfing – Bearish | Bullish
• Harami – Bearish | Bullish
• Harami Cross – Bearish | Bullish
• In Neck – Bearish | Bullish
• Kicking – Down | Up
• Ladder – Top | Bottom
• Last Engulfing – Top | Bottom
• Mat Hold – Bearish | Bullish
• Matching – High | Low
• Meeting Lines – Bearish | Bullish
• On Neck – Bearish | Bullish
• Separating Lines – Bearish | Bullish
• Star – Evening | Morning
• Stomach – Below | Above
• Tasuki Gap – Downside | Upside
• Three Inside – Down | Up
• Three Methods – Falling | Rising
• Three Outside – Down | Up
• Tweezer – Top | Bottom
• Window – Falling | Rising

Sure, it is quite a long list.

Luckily for us all, you don’t need to memorize every pattern and its criteria.  Instead, focus on price action and technical analysis principles.  The goal is to be able to look at any group of candlesticks and understand what they mean.

The more candlestick patterns you study, the easier this will become.

Takeaways

To review:

Bullish tri-stars are a type of candlestick pattern that signal a potential bullish reversal.  While not a guarantee, their appearance may indicate that market conditions are shifting in favor of buyers.  When used properly, this can help you find winning trades.

Of course, there are other candlestick patterns that you should learn about.  Still, the ability to recognize patterns is not enough to trade successfully on its own.

Nonetheless, you’ve now added one more weapon to your trading arsenal.

Have questions or more information to add?  Contribute to the conversation in the comments below!  Or, if you know someone who could benefit from this post, share it with them.  You can also check out our Candlestick Patterns Guide to improve your candlestick analysis skills.