What is Evening star candlestick pattern and how it work?
Evening Star candle is a combination of 3 candles 1st is a Green candle 2nd is a Doji candle red or green and 3rd candle should be a red candle. When the market is in an uptrend, the Evening Star candle is formed at the top level near the resistance zone or supply zone, and from there signals a bearish reversal.
When an Evening Star candle is formed, we should avoid buying the stock or avoid a long position in the index, if it is trading below the level of the evening Star candle formation.
How to work the Evening Star candlestick pattern?
If the market condition is an uptrend and reached near the resistance zone or supply zone, in the resistance zone 1 st candle will be a green candle, 2 nd candle anything red or candle but it should be a doji candle, and 3 rd Candle should be a strong red candle equal to the first green candle, so in this way evening star candle has structure.
How to trade with Evening star candle?
What should be the entry point for trade?
Wait for the third candle to complete.
Look for the pattern near resistance levels.
Check if trading volume decreases on the third candle.
You have to enter below morning star 3rd red candle.
What should be the stoploss for trade?
Place stoploss order above the top of the second doji candle.
Keep your risk manageable (usually 1-2% of your account).
Consider market volatility when placing a stop-loss order.
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