What is Evening Star candlestick pattern? How to use it in trading? This article will give you the answers to those questions about the pattern.
- 1 What is Evening Star candlestick pattern? How to identify this candle pattern
- 2 How to trade in Binomo with Evening Star candlestick pattern
- 3 Summary
What is Evening Star candlestick pattern? How to identify this candle pattern
Evening Star pattern is a pattern that appears when the price reaches the top. Just like Morning Star, this is the pattern that most of the traders are interested in when the price is in an upward trend. When the pattern appears, the market is very likely to reverses. This is how we can open a DOWN order with this pattern in Binomo.
The structure of Evening Star pattern includes a set of 3 candlesticks
The first candlestick is bullish candlestick (green candlestick).
The second candlestick is a small candlestick. It is often a Doji or Spinning candlestick.
The third candlestick has to be a bearish candlestick. Its length has to be as long as 50% of the first candlestick.
How to trade in Binomo with Evening Star candlestick pattern
We should use this pattern with 1 or 2 reversal indicators to increase the precision of the orders and find the correct entry point.
Requirement: 5-minute Japanese candlestick chart and the expiration time is from 15 minutes. With this setting, you can prevent the effect of the fake volatility of the price.
Strategy 1: Use Evening Star pattern in combination with support/resistance levels
Choose DOWN order = the price tests the resistance level+ the appearance of Evening Star pattern.
Meanings: when the price goes to the end of the upward trend, Evening Star pattern often appears. If it is the old resistance level, the price will fall in the near future.
Example: The pair of currency EUR/USD.
Strategy 2: Down order = RSI at the overbought zone + Evening Star pattern appears
Meanings: RSI is a reliable indicator that shows when the price will reverses. When RSI is at the overbought zone, the price will adjust. In this case, Evening Star pattern is a sign that the price will fall.
Example: USD/JPY currency pair.
This article gives you information about how to trade with Evening Star pattern. This is one of the special and effective candlestick patterns in the Japanese candlestick chart. If you have any questions, leave some comments for us. We will be there to help you.