Trading the USDJPY Evening Star | DailyFX: "What is a bearish evening star?
The bearish evening star is a three candle, candle pattern used to determine turns or reversals in an established uptrend. Pictured above you can see the composition of an evening star as it should appear on your graph. The first two candles are used to represent the conclusion of an existing uptrend. The second candle in the pattern is often identified with a long wick, or has the appearance of a doji candle. This is the trader’s first clue that a bearish evening star is developing.
The 3rd candle of the evening star is arguable the most important. A bearish candle is needed in this position to signal a change in the trend. Preferably traders want to see a strong selloff at this point on the graph. The further this candle declines in price, the greater bearish momentum becomes. Often we will find a bearish engulfing candle here, signaling a breakout in the trend. Now that you are more familiar with the evening star pattern, let’s look at an example."
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