What it looks like
Candle one is a long up candle in a rise. Candle two is small (a short body, either colour) and sits higher, usually with its body above candle one's close. Candle three is a down candle that closes below the midpoint of candle one's body. The pattern's high is usually candle two's high, and its low is the lowest point of the three.
What it means
Buyers were in control on the first candle. The small second candle shows they could not push much higher. The third candle shows sellers taking back more than half of the first candle. Buyers had been in control and this is where they were stopped. It is a sign the rise is tiring, not proof that it has turned.
How to trade it
- 1
Look for it after a rise, ideally at a ceiling or a level that already mattered.
- 2
Wait for the next candle to close below the pattern's low, then sell.
- 3
Example: on the US30 15 minute chart an evening star spans 80 points; the sell comes when the next candle closes below its low.
- 4
Put the stop just above the pattern's high, about 80 to 85 points in that example.
- 5
Target the nearest swing low or 2 times the stop.
A close above the pattern's high.
Where it works best
At the end of a clear rise into a ceiling such as a previous day high, a pivot or a round number, on 15 minute and higher charts.
WickSpeak finds the evening star automatically on any chart and names it on the candles that made it. Next to the name it writes what the pattern is, how to trade it and what proves it wrong, in plain English. In Playbook you can use the evening star, or any of the 146 patterns, as a condition alongside up to 12 conditions on any of 12 timeframes, then backtest it on past candles with your own costs.
Common mistakes
- Selling the third candle before any close below the pattern's low.
- Taking it in a sideways market where there was no rise to end.
- Accepting a third candle that does not close below the middle of the first.
Related patterns
Questions traders ask
Is the evening star bearish?
Yes. It appears after a rise and shows buyers being stopped. It is a sign the rise is tiring, not proof it has turned, so wait for a close below the pattern's low.
What is the difference between an evening star and an evening doji star?
In an evening doji star the middle candle is a doji, with open and close almost the same. Both are traded the same way.
Where is the stop on an evening star?
Just above the pattern's high, usually the high of the middle candle. A close above it proves the pattern wrong.
Which timeframe is best for the evening star?
It carries more weight on 15 minute, 1 hour and higher charts, especially at a ceiling. On 1 minute charts the shape appears often and means less.