Candlestick Pattern

Evening Star

The evening star is a three-candle bearish reversal pattern: large bullish candle, small-bodied candle gap up, then large bearish candle that closes below the first candle's midpoint.

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How to Identify

Large bullish candle (first candle) — strong buying pressure

Small-bodied candle (second candle) — indecision, typically gaps above first candle's close

Large bearish candle (third candle) — strong selling, closes below first candle's midpoint

Pattern forms at the top of an uptrend

The three candles should show clear volume decrease then increase

Trading Rules

Entry Rules

Enter short on close of the third candle if it closes below first candle's midpoint
Conservative: wait for confirmation (pullback to first candle's close, then decline)
Aggressive: enter on the close of the third candle immediately
Use volume confirmation — third candle should have higher volume than preceding candles

Exit Rules

Primary target: measure distance from first candle's high to third candle's low, project downward
Typical target is 1:1 to 1.5:1 risk-to-reward ratio
Secondary target: next major support level below the pattern
Consider taking profits at 50% of target first

Target Calculation

Measure the vertical distance from the first candle's high to the third candle's low. Subtract this distance from the breakout point. Example: If distance is 100 pips and breakout is at 1.2000, target = 1.2000 - 100 = 1.1900.

Stop Placement

Place stop loss above the high of the second (small-bodied) candle or just above the first candle's high. This protects against a failed reversal.

Journaling Tips

Record the size of each candle — larger first and third candles = stronger pattern

Note the gap between candles — gaps confirm separation and conviction

Log volume signature — volume should decrease on candle 2, spike on candle 3

Document the proximity of the pattern to a major resistance level

Record whether the third candle closes in lower half or upper half of its range

What Is the Evening Star Pattern?

The evening star is a three-candle bearish reversal pattern that forms at the top of uptrends. The pattern signals the shift from buying to selling and often marks the beginning of a decline.

The name comes from astronomy — a star that appears in the evening sky signals the end of daylight. Similarly, this pattern signals the end of an uptrend and the beginning of a downtrend.

How to Identify an Evening Star

Candle 1: The Bullish Candle

The first candle is large and bullish (white/green). It represents continuing buying pressure. This candle makes a higher high or closes within an uptrend. The larger the candle, the stronger the buying signal.

Candle 2: The Indecision Candle

The second candle has a small body and often gaps up above the first candle’s close. This small-bodied candle (could be bullish or bearish) represents indecision. Buyers can’t push higher; sellers won’t let price rise. This gap up shows that overnight (or in the early session) buying momentum has dried up.

If the second candle gaps up, that’s ideal — it confirms separation between the first and second candles. If there’s no gap, the candle should still be notably smaller than the first candle to show indecision.

Candle 3: The Bearish Candle

The third candle is large and bearish (red/dark). It closes below the first candle’s midpoint. This shows strong selling pressure. The larger the third candle and the lower it closes, the stronger the reversal signal.

The Complete Pattern

The three candles tell a story:

Strong buying (candle 1)
Loss of buying momentum (candle 2)
Strong selling (candle 3)

This sequence signals a reversal of trend direction.

Entry Rules for Evening Star

Conservative Approach Wait for a confirmation candle after the evening star completes. For example, after the third candle closes, wait for the next candle to also close lower. This confirms that selling pressure is sustained. Enter on this confirmation candle.

Aggressive Approach Enter on the close of the third candle if it closes in the lower half of its range with volume. This is the earliest entry but carries slightly more risk.

Volume Confirmation Check that volume increases on the third candle. Light volume on the third candle suggests the reversal may be weak. Heavy volume confirms conviction.

No Pre-Pattern Trading Don’t try to enter during the second candle anticipating the third. That’s guessing. Wait for the pattern to complete, then enter.

Target Calculation and Exit Strategy

Measure the vertical distance from the first candle’s high to the third candle’s low. This is your measurement. Subtract this distance from the close of the third candle to get your target.

Example:

First candle high: 1.2100
Third candle low: 1.2000
Distance: 100 pips
Third candle close: 1.2020
Target: 1.2020 - 100 = 1.1920

This gives you approximately a 1:1 risk-to-reward ratio if your stop is just above the second candle’s high.

Stop Loss Placement

Place your stop loss just above the high of the second (small-bodied) candle. If this level breaks, the reversal pattern has failed.

Alternatively, you can place your stop just above the first candle’s high for a wider stop, giving more room for the reversal to play out.

How to Journal an Evening Star

Log these details for every evening star trade:

Candle Sizes: Were candles 1 and 3 clearly larger than candle 2?
Gap Quality: Did candle 2 gap up from candle 1? Or just be small-bodied?
Third Candle Close: Did it close below the first candle’s midpoint? (Critical)
Volume on Third Candle: Heavy increase or modest? (Heavy = more reliable)
Pattern Location: Did it form at major resistance or in mid-uptrend?
Confirmation: What happened after the third candle closed?
Target Achievement: Did you reach your measured target?

Common Mistakes to Avoid

Mistake 1: Trading Weak Candle Differentiation If all three candles are roughly the same size, it’s not an evening star. The first and third should be clearly larger than the second. Don’t force weak patterns.

Mistake 2: Entering Before the Third Candle Closes The pattern is incomplete until the third candle closes. Entering during the third candle is entering an incomplete pattern. Wait for the close.

Mistake 3: Ignoring Volume An evening star with light volume on the third candle is weaker than one with heavy volume. Volume confirms conviction. Require volume confirmation on the third candle.

Mistake 4: Holding Too Long Once you hit your measured target, take the profit. The pattern has completed its signal. Holding longer is greed.

Mistake 5: Confusing with Morning Star The morning star is the bullish version at market bottoms. Don’t confuse them. Evening stars are at tops; morning stars are at bottoms.

Evening Star in Different Timeframes

Daily Timeframe (D1) The most reliable. Daily evening stars often precede 1-3 week declines. These are the patterns worth trading.

4-Hour Timeframe (H4) Still reliable but more frequent false signals. H4 evening stars often precede 2-7 day declines.

1-Hour Timeframe (H1) More noise. Only trade with additional confirmation (resistance level, divergence, etc.).

The evening star’s opposite is the morning star, a bullish three-candle reversal. Pin bars and inside bars are other candlestick patterns with similar reversal/consolidation implications.

Combine evening stars with price action analysis and support/resistance levels for higher-probability trades.

Key Takeaways

An evening star has three candles: large bullish, small indecision, large bearish
The third candle must close below the first candle’s midpoint
Gap up on the second candle is ideal but not required
Enter on the close of the third candle (aggressive) or next candle (conservative)
Calculate targets as pattern height projected downward from the third candle’s close
Place stops just above the second candle’s high
Journal candle sizes, gaps, and volume to track your personal success rate
Trade these on H4 and D1 for best reliability

Evening star patterns are powerful because they show the exact moment when buying pressure exhausts and selling begins. Master them and you’ll recognize these critical reversal moments in real-time.

Common Mistakes

Trading weak patterns where candles aren't clearly differentiated in size

Ignoring the gap up on the second candle — this shows buying weakness

Entering without volume confirmation on the third candle

Setting targets beyond the pattern's measured height

Holding too long after the target is hit

Frequently Asked Questions

How is an evening star different from a morning star?

An evening star is a bearish reversal pattern forming at the top of uptrends. A morning star is a bullish reversal pattern forming at the bottom of downtrends. They're mirror images of each other — same structure, opposite direction.

What if the second candle doesn't gap up above the first candle's close?

The pattern is still valid, but the gap up adds confirmation. An evening star without the gap up is weaker. The key is the small-bodied indecision candle, which signals that buyers have lost momentum. The gap makes it stronger.

Should the third candle close below the first candle's midpoint or just below the open?

The classic definition requires the third candle to close below the first candle's midpoint. This shows that sellers have taken control. A close just below the open is weaker. Look for third candles that close in the lower half of the first candle for strongest patterns.

What if the third candle opens above the second candle but closes way below it?

This is a bearish sign — it shows aggressive selling during the candle. This confirms the reversal and often leads to sharper downside continuation. Strong third candles with wide ranges are ideal.

Can evening stars occur on shorter timeframes like 1-hour charts?

Yes, but they're noisier. Hour charts have more false patterns due to daily volatility spikes. Focus on H4 and D1 evening stars where they're more structural and less noisy.

How reliable is the evening star pattern?

Evening stars are moderately reliable (around 65-75% success rate) when properly identified. The pattern is strongest when it forms at major resistance levels or after extended uptrends. Journal your patterns to track your personal success rate.

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