Evening Star

AAA

DEFINITION of 'Evening Star'

A bearish candlestick pattern consisting of three candles that have demonstrated the following characteristics:

1. The first bar is a large white candlestick located within an uptrend.
2. The middle bar is a small-bodied candle (red or white) that closes above the first white bar.
3. The last bar is a large red candle that opens below the middle candle and closes near the center of the first bar's body.

As shown by the chart below, this pattern is used by traders as an early indication that the uptrend is about to reverse.

Evening Star

INVESTOPEDIA EXPLAINS 'Evening Star'

Evening star formations can be useful in determining trend changes, particularly when used in conjunction with other indicators. Many traders use price oscillators and trendlines to confirm this candlestick pattern.

RELATED TERMS
  1. Indicator

    Indicators are statistics used to measure current conditions ...
  2. Upside Tasuki Gap

    A candlestick formation that is commonly used to signal the continuation ...
  3. Gravestone Doji

    A type of candlestick pattern that is formed when the opening ...
  4. Tri-Star

    A type of candlestick pattern that signals a reversal in the ...
  5. Morning Star

    A bullish candlestick pattern that consists of three candles ...
  6. Candlestick

    A chart that displays the high, low, opening and closing prices ...
RELATED FAQS
  1. What are the best technical indicators to complement the Triple Exponential Moving ...

    Some of the best technical indicators traders use to complement the triple exponential moving average (TEMA) are the average ... Read Full Answer >>
  2. How do I implement a forex strategy when spotting a Star Pattern?

    The three candlestick star patterns are commonly interpreted by traders and analysts as market reversal signals. Since all ... Read Full Answer >>
  3. How do I build a profitable strategy when spotting a Star pattern?

    The morning star and evening star candlestick patterns are interpreted by traders as market reversal signals. A profitable ... Read Full Answer >>
  4. What are the most common Bearish patterns used by traders?

    The bearish engulfing pattern may occur at the top of a longer-term uptrend or a corrective retracement during a downtrend. ... Read Full Answer >>
  5. How effective is creating trade entries after spotting a Evening Star pattern?

    The evening star candlestick pattern is a relatively rare bearish reversal pattern, though it more than makes up for this ... Read Full Answer >>
  6. How is an Evening Star pattern interpreted by analysts and traders?

    The evening star candlestick pattern is interpreted by traders and market analysts as a signal of a bearish market reversal ... Read Full Answer >>
  7. How do I build a profitable strategy when spotting an Evening Star pattern?

    A trader can seek to take advantage of the evening star candlestick pattern, interpreted as a signal of a bearish market ... Read Full Answer >>
Related Articles
  1. Charts & Patterns

    The Basic Language Of Candlestick Charting

    If you want to use candlestick charting to get a sense of where a stock is headed, you need to learn how to read this unique charting language.
  2. Charts & Patterns

    Candlestick Charting: What Is It?

    Discover the components and basic patterns of this ancient technical analysis technique.
  3. Forex Education

    Make Sharp Trades Using Andrew's Pitchfork

    This technical indicator is underused in the currency markets, but it can help you isolate profitable opportunities.
  4. Forex Education

    Candlestick Charting: Perfecting The Art

    Take a look at continuation patterns and how they can confirm or deny trends.
  5. Charts & Patterns

    Candlesticks Light The Way To Logical Trading

    Crowd psychology is the reason this technique works. Find out how to make it work for you.
  6. Active Trading

    Candle Sheds More Light Than The MACD

    Read the case against this well-established indicator.
  7. Active Trading

    Star Formations Spotlight Luminary Trades

    Morning, evening and doji stars will have you basking in better trading profits.
  8. Chart Advisor

    Stocks Breaking to Downside - Time to Sell?

    These stocks have broken patterns or trendlines to downside, indicating more selling could be coming.
  9. Chart Advisor

    3 Ways To Trade The Bounce In Coal

    News from the Supreme Court has caused active traders to turn their attention to the coal markets. We'll take a look at how to trade the bounce.
  10. Chart Advisor

    How Investors are Profiting from Cyber Crime Fear

    An ETF that has seen significant gains this year in the growing field of cyber security, and the threat and fear of cyber attacks and cyber crime.

You May Also Like

Hot Definitions
  1. National Currency

    The currency or legal tender issued by a nation's central bank or monetary authority. The national currency of a nation is ...
  2. Treasury Yield

    The return on investment, expressed as a percentage, on the debt obligations of the U.S. government. Treasuries are considered ...
  3. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  4. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  5. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  6. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!