EURUSD 1.1855 USDJPY 111.61 USDCAD 1.2372 EURCZK 26.031 USDCZK 21.952 EURPLN 4.2726 USDPLN 3.6043
EURUSD 1.1855 USDJPY 111.61 USDCAD 1.2372 EURCZK 26.031 USDCZK 21.952 EURPLN 4.2726 USDPLN 3.6043

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Evening stars indicate a possible upward trend reversal

Rule of thumb

The length of the third falling candle may indicate the magnitude and strength of the trend reversal

Chart type: Candlestick

Applies to: Reversal

Significance: High

 

The evening star is a formation represented by three candles, indicating a possible reversal of an upward trend (top reversal). In this sense an evening star is an inverted version of a Morning star formation. 

 

evening star, formation

 

In the properly formed Evening star, the first candle is a rising one. The second candle may be a rising or falling one which generates a gap in comparison with the previous one.  A gap is considered a situation where the minimum price of the second candle is higher than the maximum price of the first one. The third candle is a falling candle - ideally there should also be a gap between the second and third candles.

 

How to use it with MetaTrader 5:

  • Select the candlestick chart with the Candlesticks icon.
  • Look for a clearly visible upward trend.
  • The first candle is a rising candle.
  • The second candle may either be a rising or falling candle, but with a gap comparing  with the previous candle.
  • The third candle is clearly a falling candle. 

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