Evening doji star pattern in Forex
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The evening doji star pattern is the opposite to the morning doji star pattern and it comprises of the following 3 candles:
- White candle (this can be a strong candle or a candle with a strong body and long wicks)
- Doji candle who’s colour does not matter
- A black candle
The evening doji star pattern appears at the top of up-trends. The reason for its appearance is to reverse the current up-trend into a down-trend where the bears can take control of the market. In order to form and be recognized the evening doji star pattern has to adhere to the following rules:
- First candle always has to be a white candle
- Second doji candle has to open and close at or above the first, white candle’s close. This is not required but it is preferred i.e. the doji candle can open and close lower than the close of the white candle.
- Last, black candle has to close below the first, white candle’s close. The further it closes into the white candle’s body, the stronger the evening doji pattern is.
Just because you see this pattern forming it does not mean that you need to place a ‘sell’. This is because this pattern appears in the market quite regularly and more confirmation is required to trade it. If it is traded without confirmation i.e. its appearance alone, you may find that it is a ‘fake’ signal for a reversal.
In the chart below, we can see that the evening doji star pattern has completely turned the market around. This is the type of power this pattern has, which can be seen a lot of the time.
Evening doji star shows us how it can turn the market around.