4.5 Evening star pattern explained Video Lecture | Forex: Learn and Master Trading (English) - Business Basics

welcome back to capex forex trading comm
in this lesson we're going to discuss
another reversal pattern called the
evening star pattern which is the
opposite to the morning star pattern now
in terms of his definition the evening
star pattern comprises of three candles
the first is a white candle the second
is a candle whose color does not matter
and the last one is a black candle now
the evening star pattern always occurs
at the top of an uptrend so its purpose
is to turn the current up trend around
back into the downwards direction now in
terms of the rule for the evening star
pattern the first candle always has to
be a white candle the second candle has
to be a small spinning top which is
basically a candle with a small body and
small shadows now that candle has to
open and close at or above the first
white candles closed which is this line
here now the third candle has to be a
strong black candle that opens at or
below the second candles closed which is
this candle here and it also has to
close more than half way into the first
white candles real body
so if this black candle closed in this
area here then this pattern would not
qualify as an evening star pattern so in
terms of our example we've got an
evening star formation here at the top
of the uptrend so we've got an uptrend
that starts here and it goes all the way
up to this price level now the first
candle in the formation is this white
candle here now this might not be a
strong white candle but because it isn't
white candle we can start our formation
because remember the shadows can overlap
it is the bodies that we're more focused
on when we're looking into the evening
star pattern the second candle is a
small spinning top that opened and
closed above the first white candles
close and lastly we've got a strong
black candle that opened below the
second candles
and also closed more than half way into
the first white candles real body so you
can see that the formation of this
pattern has halted the uptrend and
turned the market back around into the
downwards direction so one thing that
you must not do is place a cell every
time that you see an evening star
pattern the reason why is because this
kind of pattern occurs in a market quite
regularly and we need a lot more
confirmation to take this trade so as
always if you have any questions or any
comments do let us know and we shall see
you in the next lesson