Bearish Evening Doji Star Pattern

Bearish evening Doji star pattern is one of the most reliable Japanese candlestick patterns which indicate a possible trend reversal. This candlestick pattern includes three candlesticks; often formed at the top of an uptrend and indicate a possible downtrend. Evening Doji star pattern is widely followed by all types of traders trading all types of financial instruments.

The requirements of a bearish evening doji star pattern include,

• It should be formed after a significant uptrend.
• First day is should be bullish characterized by a long white (colorless/bullish) candlestick.
• Second day is the day of uncertainty which result in formation of a doji star (where opening and closing prices are almost equal).
• Third day should be bearish characterized by a black (colored/bearish) candlestick, ideally which closes below the mid-point of first day candlestick.

Bearish evening doji star formation occurs when instruments are at their overbought positions. Bulls dominate the first day; on second day the market opens at a gap but the increasing uncertainty lowers the confidence of bulls; on third day bears start to dominate.

With evening doji star pattern, there is always chance of formation of more than one doji star candlestick. Even though it is a highly reliable pattern, confirmation is still suggested which can be a bearish candlestick or gap on fourth day. The gapping of doji candlestick is not a necessary requirement, especially for forex traders as the market is continuous.

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