The Evening Star candlestick is a three-candle pattern that signals a reversal in the market. Correctly spotting reversals is crucial when trading financial markets because it allows traders to enter at attractive levels at the very start of a possible trend reversal.
How to identify Evening Star?
Identifying the Evening Star on forex charts involves more than simply identifying the three main candles. What is required, is an understanding of previous price action and where the pattern appears within the existing trend.
Example of Evening Star in Chart
One can identify this candlestick pattern by the formation of below four candlesticks:
Small bearish or bullish candle: The second one is a small candle that indicates that there is uncertainty and shows the signs of a slowing uptrend.
Large bearish candle: This signals selling pressure by the bears.
