Patterns of Candlestick: Evening Stars
Star pattern is a reversal pattern consisting of three candles, with a candle that is forming stars. Stars is a candle with a short real body, like a doji or spinning top, which is detached from the real body candle before. There are three basic stars pattern: morning stars, which appear in downtrend; evening stars and shooting stars, which appear in the uptrend.
The evening star pattern is a bearish reversal pattern indicating a potential upside trend reversal. This is the opposite of morning star patterns and like a morning star, consisting of three candles with a candlestick in the middle being a star.
The first candlestick in the evening star pattern should be light (bullish) and must have a relatively large body. The second candlestick is a star, which is a short body candlestick that does not touch the real body candlestick before. Gap or the distance between the real body of the two candlesticks is what distinguishes the star with a doji or spinning top. The candle star can also form in the shadow below the first candlestick. The appearance of the star is the first indication of the trend’s weakening. This indicates the buyer is unable to push the price up to close higher than the close of the previous period. This weakness is confirmed by the candlestick that follows the star. This candlestick must have been a dark candlestick that closed in the first candlestick body.
The reliability of the evening star pattern will increase if the third candlestick opens below the real body of the star so as to leave the distance between the real body of the star and the third candlestick. However, this is very rare. Reliability is also increasing by looking at the extent to which the real body of the third candlestick penetrate the first real body candlestick. If the third candlestick has little or no shadow down. Finally, the volume should also be considered a more reliable pattern determiner if the volume at the first candlestick is lower and the volume at the third candlestick is higher.