Evening Star — Three-Candle Bearish Reversal

Evening Star is the bearish twin of Morning Star — three candles marking the end of an uptrend. At XAUUSD supply zones, it’s a textbook short trigger.

📚 What is the Evening Star?

Three-candle bearish reversal pattern.

Candle 1: Large bullish candle (uptrend).

Candle 2: Small body showing indecision.

Candle 3: Large bearish candle closing below midpoint of candle 1.

🔍 How to Identify

• Candle 1: large bullish body.
• Candle 2: small body, gap up or above candle 1’s body.
• Candle 3: large bearish body, closes below midpoint of candle 1.
• Volume: candle 3 should expand.
• Location at major resistance strengthens signal.

🧠 Market Psychology

Candle 1 = peak buying. Candle 2 = exhaustion. Candle 3 = sellers take control decisively. Visual rotation from buy to sell.

💼 Trading Rules

🥇 XAUUSD-Specific Notes

• At XAUUSD supply zones = high-conviction short.
• H4 / Daily best.
• Volume expansion on candle 3 critical.
• Combine with RSI bearish divergence.

✅ Confluence Checklist

Use these criteria to validate the setup before entry. The more boxes checked, the higher the probability:

• At HTF supply / resistance.
• Bearish RSI divergence.
• Volume expansion candle 3.
• DXY strength.
• Macro shift bearish.

⚠️ Common Mistakes to Avoid

🎯 The Bottom Line

Evening Star at XAUUSD H4/Daily supply zone with volume = high-conviction bearish reversal trigger.

Part of the Best Trade Logic Pattern Library · 27 essential patterns for XAUUSD & forex traders