Evening Star Candlestick Pattern on Live Gold

What it shows

Each one gets a red label marked ES over the high of the third candle.

How Pravex works it out

1. The evening star rule never uses a fixed size: a body, open to close, is long when it beats the 14-candle exponential average of bodies and small when it falls short of it.
2. The evening star starts with a rising candle (close above open) whose body is long, above the average.
3. The middle candle must be small (below the average) and not a doji. The evening star rule calls a candle a doji when its body is no more than 5% of its high-to-low range. The bottom of its body must sit above the first candle’s close. Its colour does not matter.
4. The third candle must be falling and close at or below the middle of the first body, (open + close) ÷ 2. Its size is not tested.
5. An uptrend is required for the evening star, measured on the first of the three candles, and with the default it comes down to one comparison: is that close above the average of the last 50 closes?
6. Example numbers, not a live price: the first candle rises from 2,050 to 2,062. The middle candle opens at 2,063 and closes at 2,064. The third falls to 2,055, below the first body’s middle of 2,056.

Settings

Setting	Default	What changing it does
Trend check	SMA50	SMA50, the default, looks for a close above the 50-candle average on the first candle. Add SMA200 and the 50-candle average must also be above the 200-candle one, a stricter test that drops many evening star labels. With the check off, every evening star shape is marked, whatever the trend.
Label colour	Red (#F23645)	Colours the ES label that sits over the high of the candle completing the evening star, with the ES letters always in white.

How traders read it

The first candle is the rise at full speed. The small middle candle above it shows the buying no longer moves price much. The third candle is the sellers taking back at least half of the first candle’s gain, which is the part that makes it a turn.

The high of the middle candle is the usual stop, the top of the pattern. A third candle that closes near or under the first candle’s open is the stronger version.

An evening star takes three candles to finish, so it confirms later than a shooting star. On the 1-hour gold chart that is three hours of price action, which is often enough to see whether a level is giving way.

When it misleads

The body gap between the first and middle candles is rare on spot gold, where a candle usually opens at about the last close; often the gap is a few cents. The third candle may be small and still pass. In a strong rise, an evening star can be a short pause before new highs. One close above the 50-candle average is enough for our uptrend test. A evening star label on the newest candle is provisional: that candle has not closed, and the shape may stop holding before it does.

Questions and answers

What is an evening star pattern?

Three candles after a rise: a long rising candle, a small candle whose body is above it, then a falling candle that closes at or below the middle of the first body.

How is it different from an evening doji star?

In an evening doji star the middle candle is a doji. Here it is a small candle with a real body.

What confirms an evening star?

The third candle is already the confirmation in the pattern. A further close lower on the next candle adds to it, and a close above the middle candle’s high cancels it.

Is there a bullish evening star?

The morning star: a long falling candle, a small candle below it, then a rising candle that closes above the middle of the first.

Related: Morning Star - Bullish, Evening Doji Star - Bearish, Dark Cloud Cover - Bearish, All Candlestick Patterns, every indicator.