Buyers are in control, then indecision appears at the top — then sellers strike hard. The uptrend’s days are numbered.
What is an Evening Star?
The Evening Star is the bearish counterpart to the Morning Star. Just as the evening star (Venus) appears in the sky just before darkness falls, this pattern warns that a period of rising prices may be coming to an end.
Candle 1: A large green candle — buyers are still pushing the trend higher, everything looks fine.
Candle 2 (the “star”): A small-bodied candle that gaps up from the first. Buying momentum has stalled at the top. This is the warning sign.
Candle 3: A large red candle that closes well into the body of the first green candle, confirming sellers have taken control.
Why It Works
The Evening Star captures a critical moment in market psychology. When the star candle appears — small, hesitant, gapping above the prior trend — it shows that buyers are losing conviction at elevated prices. They pushed the open higher but couldn’t sustain the move. Then the third candle confirms that sellers have stepped in aggressively, trapping all the recent buyers at or near the highs.
This is particularly powerful at a well-known resistance level or a previous market high, where sellers are likely waiting to unload positions.
How to Trade It
- ✓ Enter short on the close of the third (red) candle or the open of the fourth.
- ✓ Most powerful at key resistance levels, round numbers, or previous highs.
- ✓ The more the third candle penetrates into the first green candle, the stronger the signal.
- ✓ A Doji as the star candle is especially significant — it shows maximum indecision.
- ✗ Weak signal if the third candle closes less than halfway into the first candle’s body.
- ✗ Don’t trade without a prior clear uptrend — the pattern needs something to reverse.
Stop loss: Above the high of the star (middle) candle — if price breaks back above that level, the reversal has failed.