Evening Star Candle: The Sunset of Buyers… and the Rise of Sellers
When markets reach a peak of optimism, the 'Evening Star Candle' appears as a dramatic signal warning of the end of the uptrend. It is not just a candle, but a three-candle formation that forces the smart trader to pause and recalculate.
🏁 Pattern Formation:
Consists of three consecutive candles:
First strong bullish candle: Represents buying momentum.
Second small-bodied candle (can be bullish, bearish, or doji): Indicates indecision or the beginning of buyer weakness.
Third strong bearish candle: Opens with a downward price gap and engulfs a large part of the body of the first candle.
🧠 What does it mean?
This pattern indicates a clear shift from buying dominance to increasing selling pressure. It serves as a 'sunset' in the market, especially if it appears at resistance or after a sharp rise.
📈 When to enter the trade?
After the close of the third candle.
With additional confirmation (such as breaking support or negative crossover in MACD or RSI).
The stop loss is placed above the peak of the pattern.
The Evening Star is a classic but very effective pattern, especially on the hourly and four-hour time frames.
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