Best Way To Trade Evening Star Pattern
In this article, we will review trading facts about the Evening Star Candlestick Pattern and how it affects the price chart.
Evening Star Candle is one of the most reliable price reversal candlestick patterns.
It is a trend reversal candlestick pattern.
Evening Star candles show traders that the Sellers (Bears) have taken control of price.
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It informs the trader that there is a development of a strong Bearing force, typically against a current uptrend.
However, it forms at the end of a bullish trend.
The example of Evening Star pattern is seen in the image below where the green candle overshadows the smaller
However, the image above shows that the red candle forms to the right side of the green candle.
The green candle, is on the left side while the red candle is on the right.
For one to trade the Evening Star candlestick, one will place trade entry at point E, as shown in the image below.
Sell Stop pending order can also be placed a little below the closing price point around point E.
Stop loss point sill be at point S.
Moreover, for the purpose of Risk Management, Stop loss point S will be at a tiny-pip distance little above the S area.
Take profit will be twice the total length of the Bearish candle plus the small candle at the top.
The above image shows an example of how a Evening Star candle pattern forms at the top of a bullish trend.
The red candle on the right forms directly at the opposite level to the green candle on the right just after the formation of a small candle on the top.
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