Evening Star
The evening star is a three-candle bearish reversal pattern with a bullish candle, a small-bodied star, and a bearish candle, signaling a market top.
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How to Identify
The first candle is a large bullish (green) candle in an uptrend
The second candle is a small-bodied candle (doji or spinning top) that gaps up
The third candle is a large bearish (red) candle that closes below the midpoint of the first candle
Volume typically increases on the third candle as sellers take control
The pattern appears after a sustained uptrend
Trading Rules
Entry Rules
- Enter short at the close of the third candle or the open of the following candle
- Confirm the third candle closes below the midpoint of the first candle
- Verify the pattern forms at a known resistance level or supply zone
Exit Rules
- Place stop-loss above the high of the second candle (the star)
- Target the nearest support level below
- Trail stops as the decline unfolds
Target the starting point of the uptrend that preceded the pattern. Alternatively, use the combined range of all three candles as a minimum measured move.
Place stop-loss above the highest point of the three candles, which is typically the high of the second (star) candle.
Success Rate
71% according to Bulkowski
Success rates vary based on market conditions, timeframe, and trader experience. Always validate patterns with your own journal data.
Journaling Tips
Record the size relationships between the three candles
Note whether the star candle gapped up from the first candle
Track the volume on each of the three candles for pattern validation
The evening star is the bearish counterpart of the morning star. It marks the transition from bullish to bearish momentum through a clear three-candle sequence that tells the story of trend exhaustion.
Pattern Structure
The evening star consists of three distinct candles that together paint a picture of reversal:
First candle: A strong bullish candle continues the uptrend, showing buyers remain confident.
Second candle (the star): A small-bodied candle, ideally gapping above the first, shows momentum is stalling. Neither buyers nor sellers can gain the upper hand.
Third candle: A large bearish candle that closes below the midpoint of the first candle confirms that sellers have taken control.
What Makes It Work
The evening star works because of the psychological dynamics at play:
- The first candle attracts more buyers who expect the uptrend to continue
- The star candle traps late buyers with a small gain or loss
- The third candle panics those buyers into selling, adding fuel to the decline
- The break below the first candle’s midpoint triggers stop-losses
This cascade of selling creates the initial momentum for the new downtrend.
Ideal Conditions
The most reliable evening stars form when:
- The preceding uptrend has been running for several candles or more
- The pattern appears at a significant resistance level
- The star candle has very small body or is a doji
- The third candle is large and closes near its low
- Volume increases on the third candle
Confirmation and Entry
The conservative entry is at the close of the third candle or the open of the following candle. This provides maximum confirmation at the cost of a less favorable entry price.
More aggressive traders enter during the formation of the third candle if it is clearly bearish and closing below the first candle’s midpoint with volume.
Tracking Evening Star Trades
In your trading journal, record each evening star with details about the resistance level, gap presence, and candle size relationships. Compare your results with evening stars versus other bearish reversal patterns to understand where your edge lies.
Common Mistakes
Entering short after the second candle before the bearish third candle confirms the reversal
Trading evening stars during strong uptrends where the reversal may not hold
Ignoring the support levels below that could limit the downside potential
Frequently Asked Questions
How reliable is the evening star pattern?
The evening star has approximately a 71% success rate according to Bulkowski's research. Reliability increases when the pattern forms at major resistance levels and is confirmed by volume expansion on the third candle.
What happens if the third candle does not close below the midpoint?
If the third candle is bearish but does not close below the first candle's midpoint, the pattern is weaker. Some traders still take the trade but use tighter targets and smaller position sizes.
Can evening stars appear in forex markets?
Yes. While gaps are less common in 24-hour forex markets, the three-candle sequence remains valid without gaps. The key is the shift from bullish momentum to indecision to bearish momentum.
Start Tracking Your Patterns
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