Evening Star

The Pattern

An Evening Star forms across three consecutive bars:

1. A long up-bar continues an existing uptrend.
2. A small-bodied bar (either color) gaps up or opens near the prior close, then prints a narrow range. The “star”.
3. A long down-bar closes well into the body of the first bar, often below its midpoint.

The middle bar represents indecision at the highs, the third bar represents resolution to the downside.

The Story Behind It

Evening Star is the bearish mirror of the Morning Star and one of the most-cited three-bar reversals in candlestick literature. The first bar continues the uptrend, the second pauses it (buyers cannot push price further up even after a strong open), and the third confirms that sellers have taken control. The three-bar structure is treated as more reliable than single-bar reversals because the regime change is visible in the price action itself rather than inferred.

As with Morning Star, variants exist depending on the second bar’s character. When the star is a doji the pattern is called an Evening Doji Star and is treated as a sharper signal.

When It Tends To Work

• After a clear, multi-bar uptrend rather than a brief rally.
• When the third bar closes below the first bar’s midpoint, indicating sellers covered most of the up-bar’s gain.
• In single-commodity contracts that lack the structural long bias of equity indices.

When It Tends To Fail

• In equity indices during strong bull regimes. The three-bar pattern fires but the dip-buy reflex often kicks in before the hold window completes.
• When the middle bar’s body is not small enough to genuinely show indecision.
• On low-frequency contracts. The pattern is strict and may fire only a handful of times per year.

How This Strategy Trades It

Enter short at the close of the third bar. Hold for hold_bars sessions (default 5), then flatten unconditionally.

Related Patterns

• Morning Star: the directional mirror.
• Three Black Crows: an alternative three-bar bearish setup, all three bars push the same direction instead of forming a reversal sequence.
• Bearish Engulfing: a two-bar version of the same control-shift idea.

Try It Yourself

The default preset uses 1-contract sizing on NQ daily bars. The form lets you change the contract, timeframe, hold length, and contract count.