Evening Star

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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.

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RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. 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 >>
  4. 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 >>
  5. 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 >>
  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 >>
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