Evening Star Candlestick Pattern Learn How to Identify and Trade to Boost Your Trading Success

  1. Technical Analysis
    1. How Technical Analysis Can Help You Make Informed Decisions in Mastering Stock Trading
    2. Technical Analysis Setting Realistic Expectations
    3. Introduction to Technical Analysis and Assumptions
    4. Technical analysis for Profitable Trades Analyzing Open, High, Low, and Close
    5. Candlestick Charts How Line and Bar chart Enhance Market Analysis
    6. Japanese Candlesticks History, Anatomy From Ancient Japan to Global Trading Phenomenon
    7. Time Frames in Technical Analysis Unlocking the Power of Choosing the Right Interval for Successful Trading strategy
    8. Candlestick Patterns How to Identify and Interpret Trading Signals
    9. Marubozu and Bullish Marubozu Understanding What is Essential Single Candlestick Patterns for Traders
    10. Marubozu Candlestick Setting Stop Loss The Ultimate Guide to Trading Patterns
    11. Spinning Top Candlestick Navigating Downtrends A Trader’s Guide to Identifying Reversal Signals
    12. Spinning Top and Doji How to Interpret and Navigating Market Uncertainty
    13. Paper umbrella and hammer candlestick pattern Unlock Profitable Trades
    14. Hanging man candlestick pattern Profitable share market trading Strategies
    15. Shooting Star Candlestick Pattern Boost Your Trading Success Guide
    16. Engulfing Patterns and Bullish Engulfing Signals Unlock Trading Opportunities
    17. Bearish Engulfing and Doji for Trading Success Profitable Strategies with Candlestick Patterns
    18. Multiple Candlestick Patterns Insights and Strategies Boost Your Trading
    19. Bullish Harami Candlestick Pattern for Trend Reversal Strategies
    20. Shorting Guide using the Bearish Harami Pattern Trade Reversals with Confidence
    21. Morning Star Candlestick Pattern and Gap Analysis To Maximise Your Profits
    22. Evening Star Candlestick Pattern Learn How to Identify and Trade to Boost Your Trading Success
    23. Support and Resistance Basics A Comprehensive Guide to Setting Targets and Navigate the Markets with Confidence
    24. Support and Resistance Learn How to Draw and Identify Key Levels Unlocking Trading Opportunities
    25. Support and Resistance Advanced Trading Strategy Analysing Reliability and Optimisation
    26. Volume Trends How to Leverage for Successful Trading Strategy
    27. Volume Analysis A Key Checklist for Successful Stock Trading
    28. Moving Averages A Comprehensive Guide for Trend Analysis in Stock Trading
    29. How to Use Moving Averages for Profitable Trading Strategy and Potential Opportunities
    30. Moving Average Crossover Boost Your Trading Success with A Reliable Strategy
    31. Technical indicators How to Use Technical Tools for Better Decision-Making Unlocking the Power of Trading
    32. Relative Strength Index RSI Analysing Overbought and Oversold Signals to Boost Your Trading Strategy
    33. MACD How to Interpret and Utilize Moving Average Convergence and Divergence for Profitable Trading
    34. Bollinger Bands The Power of Indicators in Trading and checklist
    35. Fibonacci Retracements Unravelling the Power in Stock Markets
    36. Mastering Fibonacci Retracement A Step-by-Step Guide for Effective Trading
    37. Dow Theory Decoding Unveiling the Principles of Technical Analysis
    38. Dow Theory Patterns Unlocking Trading Opportunities with Double and Triple Formations
    39. Trading Range Explained chart indicator example strategy Profit from Market Ranges
    40. Flag Pattern and Range Breakout How to Capitalise Trading Beyond Boundaries
    41. Risk reward ratio Understanding RRR in Dow Theory
    42. Technical Analysis Tools for Traders Charting Software Guide Enhance Your Trading
    43. How to Select Stocks for Trading Success and Building Your Opportunity Universe
    44. Short Term Trading Unleashing the Power of Scalping Strategies
    45. ADX Indicator and 7 more indicator tools for Trend Strength Analysis
Marketopedia / Technical Analysis / Evening Star Candlestick Pattern Learn How to Identify and Trade to Boost Your Trading Success

 The evening star

The evening star is the final item on our list of candlestick patterns presented in this module.

The evening star is essentially a bearish counterpart of the morning star. It appears at the peak of an uptrend and manifests itself as a three-candle formation in three consecutive trading sessions, just like its positive counterpart.

The reasons to go short on an evening star are as follows:

  1. The market is on an upward trajectory, with the bulls firmly in control.
  1. Throughout an uptrend, the market or stock will reach fresh highs.
  1. On the first day of the pattern (P1), the market rose, hitting a new high and ending close to its peak. The long blue candle on day 1 (P1) illustrates strong buying activity.
  1. On the second day of the pattern (P2) the market opens with a gap affirming that bulls are in control. However, an unfavourable closing – a doji/spinning top – sets off alarms for bulls, as the market/stock does not move.
  1. On the 3rd day of the pattern, the market opens with a gap down and ends in a red candle, suggesting that the sellers are in control. Consequently, P3’s price action causes an alarm among the bulls.
  1. It is anticipated that the bulls will continue to be anxious, leading to a bearish outlook over the following trading days. Hence, one ought to consider taking short positions.

The trade setup for an evening star is as follows:

  1. Short the stock on P3 at the close of 3:20 PM, but first, ensure that P1 to P3 form an evening star.
  1. To substantiate the evening star formation on day 3, one must appraise the following:
  1. P1 ought to be blue in colour.
  1. P2 could be a doji or a spinning top with an upward gap opening.
  1. P3 needs to open with a gap down and be a red candle. At 3:20 PM, the price should be lower than P1’s opening rate.
  1. Risk-takers and those who are more cautious can both begin trading on P3.
  1. The stop loss for the trade should take the form of the most elevated high from either P1, P2 or P3.

Summarising the entry and exit for candlestick patterns

To finish this chapter, we have summarized the entry and stop loss for both long and short trades. We haven’t addressed targets yet, though, that will be discussed in the next chapter.


A risk-taker should enter the trade on the final day of pattern formation close to the closing price (3:20 PM). To qualify as a trade, ensure that the rules of the pattern are fulfilled.


The risk-averse trader will initiate a trade after they have identified a confirmation on a subsequent day. To open a long position, they seek a blue candle while aiming for a red one to set up short trades.

Generally, the more days in a pattern, the better it is to execute the trade on that day.

The stoploss for a long trade is the lowest low of the pattern, while the stoploss for a short trade is the highest high of it.

What next?

You might wonder if there are only 16 types of candlestick patterns. 

No, not really. Although there are numerous candlestick patterns, a further explanation would be counterproductive to attaining our ultimate goal.

The objective is to comprehend and identify that candlesticks constitute a mode of analysing the markets. It is not necessary to be aware of all the patterns.

Once you learn the art of car driving, there is no difference in handling a Honda or Hyundai or Ford. Similarly, when training your mind to spot a candlestick pattern, the chart does not matter; bear in mind that mastering this skill requires rigorous learning and trading it correctly.

So, based on our discussion here, my suggestion to you is to be familiar with the patterns we went through – they are some of the most common and lucrative ones to trade with on the Indian markets. As you advance, begin creating trades based on the understanding of what motivates bulls and bears. This way might be the most effective way to learn candlesticks over time.