What is Evening star?
Kechki yulduz
In short
The mirror of the morning star: at the top of a rally, a large green candle, a small-bodied "star" and a large red candle that closes below the middle of the first body. A hint that the rally is ending.
The evening star is a three-candle bearish pattern at the top of a rally — the mirror of the morning star.
The three candles
- A large green candle — the rally continues strongly, buyers are confident.
- The "star" — a small-bodied candle (a spinning top or doji), often slightly above candle 1. The move has stalled; indecision appears.
- A large red candle — closes below the midpoint of candle 1's body. Sellers have taken the initiative.
Why it works
The pattern shows a three-step shift in sentiment: confidence → indecision → fear. The deeper the third candle falls, the stronger the signal. If the middle candle is a doji, it is sometimes called an "evening doji star".
How to use it
The evening star is considered one of the more reliable candle patterns, especially near resistance and with rising volume on the third candle. Still, it is a probability, not a guarantee. A short stop typically goes above the star's high. The third candle may be followed by an extended decline such as three black crows.
For an investor who bought at $73.70: the third candle of the evening star closed at $77.60 — exiting there keeps a +$3.90 gain. Whoever waited for the three black crows to finish saw the gain shrink to +$0.30. In this course, bearish patterns are a reason to exit or not to buy.
Example
Illustrative: a stock rose from $80 to $98 over a month.
- Day 1: open $90.00, close $98.00. Body midpoint: $94.00.
- Day 2 (star): open $99.00, close $99.30, high $100.20 — a body of just $0.30.
- Day 3: open $97.50, close $92.80 — $1.20 below the midpoint ($94.00).
The pattern is complete. A trader considering a short at $92.80 with a stop above the star's high, at $100.50, takes $7.70 of risk per share. That's a wide stop, so the position shrinks: with a $10,000 account and 1% risk ($100), $100 ÷ $7.70 ≈ 12.99 → 12 shares.
Mistakes and tips
The third candle must close below the middle of candle 1's body — otherwise the pattern is incomplete.
Stops after an evening star are often wide; shrink the size to fit the stop, not the other way round.
Even in a strong uptrend this pattern can fail; judge it alongside resistance and volume.
Frequently asked questions
- Does price always fall after an evening star?
- No. It is a relatively strong bearish pattern, but it works in probabilities. That is why the stop and position size are set in advance.
- What is the difference between an evening star and dark cloud cover?
- Dark cloud cover has two candles; the evening star has three, with an indecision candle in the middle. The evening star is usually considered stronger.
Learn it in the Academy
This term is covered with hands-on examples and a quiz in these lessons of the interactive course.
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