What is the Evening Star Pattern?
Evening Star
Forex Trading Glossary
Quick Answer: The Evening Star is a bearish three-candle reversal pattern that signals buyers are losing control after an uptrend.
What is the Evening Star Pattern?
The Evening Star is a three-candle bearish reversal pattern that appears after an uptrend. It signals a potential shift from buying pressure to selling pressure.
Pattern Structure
- First candle: Strong bullish candle continuing the uptrend.
- Second candle: Small-bodied candle that gaps higher, showing indecision.
- Third candle: Bearish candle closing well into the first candle's body.
- Volume: Elevated volume on the third candle adds conviction.
Confirmation Helps
Wait for price to trade below the Evening Star low or for supporting indicators to turn bearish before entering.
Trading the Evening Star
- Entry: Consider short positions after price breaks the pattern low.
- Stop placement: Above the pattern high or nearby resistance.
- Targets: Prior support zones or measured moves.
- Context: The signal is strongest at significant resistance levels.
Related Terms
Learn More About Forex Trading
Now that you understand evening star, explore our comprehensive guides: