So far we saw the morning star and the shooting star, so we’re now gonna have a look at the pretty evening star reversal pattern.
The evening star is a three-candlestick reversal pattern indicating the end of an uptrend or a rally.
Its first candle is a long white body in the direction of the trend “showing off” the buyers’ strength, and the second has a small black or white candle that may open above the prior close.
Lastly, the third candle is a long black body that closes well intο the long white body, ideally below fifty per cent, and it signals the end of the uptrend.
The signal for the evening star is to sell when the next candle falls below the low of the pattern.
Of course, a protective stop loss is suggested at the high of the pattern!
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