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Evening Star Candle Pattern
The evening star is cousin to the evening doji star, but I’ll guess you already knew that. The difference is in the star, which is the middle candle of the three candle pattern. The evening star sounds like the name of a newspaper, doesn’t it?
Evening Star: Important Results
Theoretical performance: Bearish reversal Tested performance: Bearish reversal 72% of the time Frequency rank: 71 Overall performance rank: 4 Best percentage meeting price target: 50% (bull market, up breakout) Best average move in 10 days: 8.77% (bear market, up breakout) Best 10-day performance rank: 4 (bear market, up breakout) All ranks are out of 103 candlestick patterns with the top performer ranking 1. “Best” means the highest rated of the four combinations of bull/bear market, up/down breakouts. The above numbers are based on hundreds of perfect trades. See the glossary for definitions. |  Evening Star |
The evening star acts as a bearish reversal of the upward price trend, and when the breakout occurs, hold on for dear life. The overall performance rank is very high, but most of the performance is due to upward breakouts, not downward ones. In fact, you will want to avoid trading the evening star after a downward breakout in a bull market
Evening Star: Discussion
More
The evening star candlestick acts in theory as it does in reality, as a bearish reversal of the upward price trend 72% of the time. That gives it a rank of 10th, which is high. However, with a 71 frequency rank, it may be a long time before you see one in the bush. The overall performance rank is 4th, and that is top notch. Once the trend begins, it tends to remain trending.
Evening Star: Identification Guidelines
Characteristic
Discussion
Number of candle lines
Upward.
Price trend leading to the pattern
Upward.
Configuration
Look for a tall white candle in an upward price trend. Following that, a small bodied candle of any color should gap above the bodies of the two adjacent candles (ignore the shadows). The last day is a tall black candle that opens below the prior candle, and closes at least midway down the body of the first day.
Evening Star: Three Trading Tidbits
More
- Evening star candles that appear within a third of the yearly low in a bull market perform best — page 338.
- The evening star candlestick breaks out downward most often — page 341.
Evening Star: Example
This evening star candlestick appears in an upward price trend. It sports a tall white candle on the first day followed by a smaller candle that is black but can be white, red or any color of your choice, just as long as the body remains above the surrounding two candles. On the last day a tall black candle appears that gaps below the middle candle and closes at least midway down the first candle (the tall white one).
This evening star candlestick acts as a bearish reversal of the up trend since the breakout is downward. A downward breakout occurs when price closes below the bottom of the candlestick pattern. In this example, the new downtrend is a lasting one, but it takes its time trending lower.
It is difficult to say from the chart, but this could be an example of the evening star appearing as part of an upward retracement of the primary downward price trend. That means price is moving lower over the longer term then price retraces — moves up — before the evening star appears and sends price tumbling again, to rejoin the original downward move. Finding those situations represents a delicious trading setup.
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