Evening star candlestick

The pattern has three candles, each with its own role. The first is a long rising candle: buyers are in control. The second, the star, has a small body above the body of the first: the buying has stalled. The third is a long falling candle that closes deep inside the body of the first, at least below its midpoint.

The name comes from Japanese candlestick charting and refers to the evening star that appears before nightfall. Steve Nison described the pattern for Western traders.

Gaps between bodies are common on stocks and rare in crypto and forex, where each candle opens at the previous close. There traders accept a star whose small body sits at the top end of candle 1 rather than fully above it.

• Prior trend – an advance. Without it there is nothing to reverse.
• Candle 1 – a long rising body, larger than the recent average.
• Candle 2 – a small body, rising or falling, above the body of candle 1. In the classic version there is a gap between the two bodies.
• Candle 3 – a long falling body that closes below the midpoint of candle 1. The lower the close, the stronger the reading.
• Wicks – they may overlap. The gaps are measured between bodies.

The pattern carries more weight at a resistance level, when the RSI is in overbought territory, and when volume rises on the third candle. Holders of a long position often use an evening star as a reason to take profit rather than to open a short. In Replay mode on Charts you can step through past advances one candle at a time and see how each evening star played out.

• Entry – a short on the close of the third candle, or when price trades below its low. The pattern is complete only when the third candle has closed.
• Stop – above the high of the star, the highest point of the pattern.
• Target – the nearest support, often the level where the last leg of the advance began, or a fixed multiple of the risk.
• Position size – three candles with long bodies put the stop far from the entry. Size the trade from that distance.

The morning star is the mirror pattern at the end of a decline: a long falling candle, a small-bodied candle below it, then a long rising candle that closes above the midpoint of the first. The evening star is read as bearish, the morning star as bullish.

The trading rules are mirrored as well. For a morning star the entry is a long on the close of the third candle, and the stop goes below the low of the star.

When the middle candle is a doji – open and close at almost the same price – the pattern is called an evening doji star. The doji shows a full stop in the buying rather than a slowdown, and many traders rate this version as stronger.

If the doji gaps away from both neighbours so that even the wicks do not overlap, the pattern is called an abandoned baby. It is rare.

• Entering before the third candle closes – two candles are a rise and a pause, nothing more.
• Accepting a weak third candle – if it closes above the midpoint of the first, the pattern is not an evening star.
• A large middle candle – the star must have a small body. A large one means neither side has given up.
• No advance before it – three candles of this shape inside a range do not reverse anything.
• Ignoring support below – a pattern that completes right above a strong level leaves little room for the trade.