Online Trading Blog

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.

NobleTrading.com Offers Online Stock Trading, Online Options Trading
Online Futures Trading, Online Forex Trading
Worldwide Brokerage Service, Day Trading Brokerage