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 candlesticks 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.

Evening star patterns are made up of three candlesticks The evening star has a long bullish candlestick. This signifies that the bulls are in control.

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. 

How to Trade 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 price breaks below the 3rd candlestick
• Place stop above the 3rd candle
• Some traders take a long position once price breaks above 3rd candle
• Then place stop below the 3rd candle

Evening star patterns may be top reversal patterns but they can be hard to spot. Hence the need for confirmation before jumping into a trade.

In the chart for APA shown below, you can see that the second candle tried to break the 50 SMA and could not. So the price fell below it.