Evening Star Patterns

How to Trade an Evening Star Pattern

6 min read

Evening star patterns are bearish reversal patterns. They are a three-candlestick pattern that takes place near resistance levels. The first candle is a bullish candlestick. The second candle is a smaller doji or spinning top that closes above the first bullish candle. The third candlestick is a bearish candle that closes below the second. Look for a break and hold below the third candle to complete the reversal. 

An evening star pattern consists of three candlesticks that form near resistance levels. The first candle is bullish, the second is a spinning top or doji, and the third is a bearish candlestick. Typically, the third candle forms a bearish reversal pattern.

Evening star patterns are three candlestick patterns found on stock charts. The evening star pattern is a bearish reversal pattern. Evening stars are a top reversal pattern for traders. When this pattern forms, it can be seen as a sign of bad things on the horizon. 

They comprise three candlesticks. The evening star has a long, bullish candlestick. This signifies that the bulls are in control.

Evening Star Pattern

Basics

Next comes a smaller candle that could be bullish or bearish. It’s typically a doji candle. Buyers and sellers had equal control that day. Hence, the indecision mode. It should close higher than the previous candle.

The last candlestick is then a long, bearish one. It should open near the middle of the second candle and close near the middle of the first candlestick in the pattern. The bears have now taken full control. While that may be the formation, it may not always look exactly like that.

COMPANY
Trade Ideas Logo TrendSpider Premium Partner Benzinga
DESCRIPTION Trade Ideas provides powerful tools like real-time market scanning, AI-driven trade signals, customizable alerts, advanced charting capabilities, and time-saving data visualization TrendSpider is the most robust all-in-one trading platform on the market today. Uncover strategies, pinpoint opportunities, analyze assets, and time trades like never before Benzinga allows traders to profit with actionable stock news, trading signals and alerts, A streaming platform with all the information you need to invest smarter today
HIGHLIGHTS

Trading Evening Star Patterns

  • Watch for 1st bullish candlestick to form
  • Next, watch for 2nd smaller spinning top or doji candlestick to form
  • Then, watch for 3rd bearish candlestick to fall below the 2nd
  • Traders take a short position once the price breaks below the 3rd candlestick
  • Place stop above the 3rd candle
  • Some traders take a long position once the price breaks above 3rd candle
  • Then, place the stop below the 3rd candle

Evening Star Pattern Example

Evening Star Pattern DASH

This is an example of an evening star pattern on a daily chart of $DASH. Price had a very long uptrend, which created a rising wedge pattern. As the price moved to the apex of the rising wedge, you’ll notice it created a shooting star pattern. The second candle had a long upper wick and a large real body. This signified that the bears were trying to push the price down.

Traders would take a short entry once the price fell below the shooting star candle and use above that candle as a stop level. This example shows that the price reversed and went into a downtrend, creating a falling wedge pattern. This is where drawing trendlines is important. Lower highs and lower lows create the falling wedge. Higher highs and higher lows form the rising wedge.

COURSE
Day Trading Course Options Trading Course Futures Trading Course
DESCRIPTION Learn how to read penny stock charts, premarket preparation, target buy and sell zones, scan for stocks to trade, and get ready for live day trading action
Learn how to buy and sell options, assignment options, implement vertical spreads, and the most popular strategies, and prepare for live options trading How to read futures charts, margin requirements, learn the COT report, indicators, and the most popular trading strategies, and prepare for live futures trading
INCLUDED

Dark Cloud Example

Evening Star Patterns NIO

This is an example of an evening star pattern on a chart of $NIO. The green lines are Fibonacci levels, which show major support and resistance levels. You’ll notice that the pattern almost resembles a dark cloud cover pattern, with part of the second candlestick covering the first. Then, the third bearish candle formed, and the price fell to the previous major support level.

A dark cloud cover can warn you that a star pattern is about to form. The second candle is bearish and shows that the bulls are losing control. The second candle couldn’t break above the previous bullish candlestick high, creating a double-top failure.

Final Thoughts

Evening star patterns may be top reversal patterns but can be hard to spot. Please always wait for confirmation before you jump into a trade. The confirmation happens when the third candlestick falls below and closes below the second candlestick. These patterns tend to form at the top of uptrends. Many times, they are at the peaks of rising wedge patterns. They signal that the bulls are about to lose control, and the bears will take over. 

Frequently Asked Questions

The evening star and evening doji star patterns are the same pattern. The only difference is that the evening doji star has a doji candle, whereas the evening star pattern could have a spinning top candle instead.

The evening star pattern is a fairly accurate pattern that has a 71% accuracy rate per Bulkowski's website.

The evening star pattern is a three-candlestick bearish reversal pattern, and the dark cloud cover is a two-candlestick reversal pattern. The second candlestick covers half of the first candle with the dark cloud cover. The evening star's second candle is typically a doji or spinning top with a candlestick close above the preceding candle.

Related Articles

FREE ONLINE TRADING COURSES

If you’ve looked for trading education elsewhere then you’ll notice that it can be very costly.

We are opposed to charging ridiculous amounts to access experience and quality information. 

That being said, our website is a great resource for traders or investors of all levels to learn about day trading stocks, futures, and options. Swing trading too! 

On our site, you will find thousands of dollars worth of free online trading courses, tutorials, and reviews.

We put all of the tools available to traders to the test and give you first-hand experience in stock trading you won’t find elsewhere.

Our content is packed with the essential knowledge that’s needed to help you to become a successful trader.

It’s important to treat day trading stocks, options, futures, and swing trading like you would with getting a professional degree, a new trade, or starting any new career.

Invest the proper time into your Trading Education and don’t try to run before you learn to crawl. Trading stocks is not a get-rich-quick scheme. It’s not gambling either, though there are people who treat it this way. Don’t be that person! 

STOCK TRADING COURSES FOR BEGINNERS

The Bullish Bears team focuses on keeping things as simple as possible in our online trading courses and chat rooms. We provide our members with courses of all different trading levels and topics.

If you’re a beginner, intermediate level, or looking for expert trading knowledge…we’ve got you covered. 

We have a basic stock trading course, swing trading course, 2 day trading courses, 2 options courses, 2 candlesticks courses, and broker courses to help you get started. Free.

Just choose the course level that you’re most interested in and get started on the right path now. Become a leader, not a follower. When you’re ready you can join our chat rooms and access our Next Level training library. No rush. We’re here to help.

Click Here to take our free courses.