Evening Star Pattern: Spot Bearish Reversals
The Evening Star candlestick pattern is a powerful technical indicator that signals a potential bearish reversal after an uptrend. Recognizing this pattern can help traders exit long positions early or prepare for shorting opportunities.
In this post, you’ll learn how to identify, interpret, and trade the Evening Star pattern like a pro.
What Is the Evening Star Pattern?
The Evening Star is a three-candle reversal pattern that appears at the top of an uptrend. It marks the transition from buying strength to selling pressure.
It’s considered a mirror opposite of the Morning Star pattern, which signals bullish reversals at the bottom of a downtrend.
Components of the Evening Star Pattern
A valid Evening Star pattern contains three distinct candlesticks:
- First Candle: A long bullish (green) candle indicating continued buying momentum.
- Second Candle: A small-bodied candle (green or red) that shows indecision. This candle can also be a Doji or spinning top.
- Third Candle: A strong bearish (red) candle that closes well into the body of the first candle, confirming the reversal.
Ideally, the second candle gaps up slightly and the third candle closes below the midpoint of the first bullish candle.
Example of Evening Star Pattern
Let’s say a stock has been rising for several sessions:
- Day 1: Long green candle—buyers are in full control
- Day 2: Small candle near the top—shows hesitation
- Day 3: Strong red candle—sellers regain momentum
This forms the Evening Star—a sign that the uptrend may be ending.
Why It’s Called “Evening Star”
Just like the Morning Star symbolizes the start of a new day, the Evening Star represents the start of the night, or the end of a bullish phase in the market.
Market Psychology Behind the Pattern
The Evening Star illustrates a shift in trader sentiment:
- Bulls dominate early (first candle)
- Buyers hesitate, and uncertainty increases (second candle)
- Bears take over (third candle), pushing price downward
This transition shows that the market is no longer convinced about further upward movement.
How to Trade the Evening Star Pattern
✅ Entry Point:
Enter a short trade at the close of the third candle or the open of the next one, confirming the bearish reversal.
✅ Stop Loss:
Set your stop loss above the high of the second (indecision) candle for safety.
✅ Take Profit:
Target previous support zones, Fibonacci levels, or use a 1:2 or 1:3 risk-to-reward ratio.
When Is the Pattern Strongest?
- Appears after a clear uptrend
- The third candle has high volume
- The red candle closes below the 50% mark of the first green candle
- Supported by RSI or MACD bearish divergence
Mistakes to Avoid
- Trading the pattern in sideways markets
- Ignoring confirmation from volume or indicators
- Confusing it with other three-candle setups like the Morning Star
Conclusion
The Evening Star pattern is a reliable warning sign that bullish momentum is fading. When confirmed with volume and trend context, it becomes a high-probability setup for spotting bearish reversals.
As part of your candlestick strategy toolkit, learning to recognize the Evening Star will sharpen your entry and exit timing in both swing and intraday trades.
FAQs
1. Can the Evening Star work on intraday charts?
Yes, though it’s more reliable on higher timeframes like daily or 4H.
2. Does the Evening Star always mean a big drop is coming?
Not always. It indicates weakness. Combine it with other tools for confirmation.
3. Can this pattern form in forex and crypto markets?
Absolutely. It’s used across all markets including stocks, forex, and crypto.
4. What’s the difference between Doji Star and Evening Star?
The Doji Star has a Doji as the second candle; the Evening Star can have any small-bodied candle.
5. Is volume confirmation necessary for the Evening Star?
Not required, but high volume on the third candle adds reliability.
