What is an Evening Star Pattern? Definition, Formula, and Example
An evening star is a three-candle bearish reversal pattern formed by a large bullish candle, a small-bodied candle that gaps or stalls above it, and a large bearish candle that closes deep into the first candle's body.
What Is an Evening Star Candlestick Pattern?
The evening star is a three-bar bearish reversal pattern that appears at the top of an uptrend. Buyers push price strongly higher on day one, momentum stalls on day two, and sellers take control on day three with a decisive down candle. The pattern is the mirror image of the morning star, which marks bottoms. It belongs to the classical Japanese candlestick toolkit and is one of the most widely scanned reversal signals on daily charts.
How to Identify an Evening Star
A valid evening star meets these criteria:
1. Prior uptrend. Price is advancing into the pattern. An evening star in a sideways range carries no reversal meaning.
2. Candle 1: long bullish body. A strong green candle with a body larger than the recent average body size.
3. Candle 2: small body (the star). A small green or red candle, or a doji, whose body sits above candle 1's close. On stocks, overnight gaps are common. On continuous markets like forex, the star sits at the top of candle 1 without a gap.
4. Candle 3: long bearish body. A red candle that closes below the midpoint of candle 1's body.
A common quantitative test: candle 3 close < (candle 1 open + candle 1 close) / 2. When candle 2 is a doji, the pattern is called an evening doji star and is graded as a stronger signal.
Worked Example: TSLA Daily Chart
Illustrative daily bars on TSLA after a 25% two-week rally:
| Day | Open | High | Low | Close |
|---|---|---|---|---|
| 1 | $412.00 | $436.50 | $410.20 | $434.80 |
| 2 | $438.10 | $442.00 | $433.90 | $437.40 |
| 3 | $431.00 | $432.60 | $414.30 | $416.50 |
Candle 1 body midpoint = ($412.00 + $434.80) / 2 = $423.40. Candle 3 closes at $416.50, below the midpoint. Candle 2's body ($437.40 to $438.10) sits entirely above candle 1's close. All criteria are met. A trader shorting the close at $416.50 places the stop above the star's high at $442.00, risking $25.50 per share, and targets the prior swing low or a key support level.
When Traders Use the Evening Star
- Exiting longs. Swing traders use the pattern as a signal to take profit or tighten stops after an extended run.
- Confluence entries. The signal is strongest when it forms at a known resistance level, a prior double top zone, or with RSI above 70 and bearish divergence.
- Volume confirmation. Candle 3 on higher volume than candle 1 confirms sellers have taken control. A volume spike on the breakdown day adds conviction.
Scan for fresh three-bar reversal setups at resistance across the market in the live scanner.
Limitations and Common Misconceptions
- It is not a trend change by itself. Many evening stars resolve into a brief pullback before the uptrend resumes. Confirmation from a lower low or a break of the rising trendline matters more than the pattern.
- Timeframe matters. On 1-minute and 5-minute charts, the pattern appears constantly and carries little edge. Daily and weekly charts produce the meaningful signals.
- Stop distance is wide. Because the stop sits above the star's high, risk per share is large relative to a single-candle entry. Position size must account for it.