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In the last lesson, we discussed bullish K-line combinations. In this lesson, we will talk about three types of bearish K-line combinations: evening star, bearish engulfing, and tower top.
1. Bearish K-line combination - Evening star
What kind of K line combination is an evening star? As indicated in the red line area in the figure.
The standard evening star consists of three K lines: first, a larger bullish candlestick, followed by a candlestick resembling a 'doji', and the third K line is a larger bearish candlestick. The validity of the evening star has specific requirements for the length of the third bearish candlestick; its closing price must be below 50% of the first bullish candlestick entity.
