Last Updated on: 16th February 2021, 11:47 pm
The only difference is that the Evening Doji Star needs to be a Doji candle for the second candle.
To identify an Evening Doji Star pattern, look for the following criteria:
- The first candle should be a tall white candle in an upward price trend.
- The second candle should be a doji whose body gaps above the first and third candles. Shadows are ignored.
- The third candle is a tall black candle that closes at or below the midpoint of the first candle
This Evening Doji Star acts as a bearish reversal of the upward price trend because the price rises into the pattern and breaks out downward.
A downward breakout occurs when the price closes below the bottom of the three-candlestick pattern. Since the price in the last candle is already near the low, a downward breakout is expected.
Vincent Nyagaka is a Professional Trader, Analyst & Author. He has been actively engaged in market analysis for the past 7 years. He has a monthly readership of 100,000+ traders and has taught over 1,000 students since 2014. Vincent is also an experienced instructor and public speaker. Check out Vincent’s Professional Trading Course here.