The Tri-Star pattern

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Definition of 'The Tri-Star pattern'

The Tri-Star pattern is a candlestick chart pattern that consists of three consecutive doji candles with very small real bodies, where the middle doji is gapped away from the other two. A doji candle is one where the opening and closing price are very close, and the candle has almost no real body.

The Tri-Star pattern is a rare and significant pattern that is seen as a strong indicator of indecision in the market. It is considered to be a reversal pattern when it appears after a significant trend, either upward or downward. The pattern suggests that the market is in a state of equilibrium, with neither buyers nor sellers gaining control.

The significance of the Tri-Star pattern is derived from the fact that it represents a period of indecision following a trend. As such, it can be a strong signal that the market is about to reverse direction. Traders and investors often look for this pattern as a signal to close out positions or to prepare for a potential trend reversal.

It is important to note that the Tri-Star pattern should be considered in the context of other technical indicators and market conditions, and should not be relied upon solely as a trading signal. As with any technical analysis tool, it is important to conduct further research and analysis to confirm any potential signals and to manage risk accordingly.

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