The Evening Doji Star candlestick pattern formation is one of the better performing three candle patterns out there.
The evening Doji Star typically appears at the top of an uptrend and signals a potential price reversal to the downside.
The first candle is a bullish candle with a large body.
The next candle is a Doji whose body must gap up above the other two candles. But it is okay if the Doji’s lower wick overlaps with the other candles.
The third and final candle should be a large bearish candle whose closing price should be located within the lower half of the first bullish candle. The third candle to the Evening Doji Star pattern should also have a gap to the downside, so that its body does not touch the Doji candle’s body.
The gap by the middle Doji candle is another important aspect to determining whether the pattern is valid or not.
The first candle tells us the current trend is still in play.
The middle candle, the Doji accompanied with the gap, tells us that buyers continue to remain in current control by pushing price up, but even with this said, the small Doji represents indecision between the buyers and sellers.
The third and final candle with the opening gap down below the Doji body and closing within the lower half of the first candle, tell us that the bears are now in the process of taking control of the assets price.
Before trading off of the Evening Doji Star candlestick pattern, though, wait for price confirmation by allowing price to move below the close of the third candle.
According to tested performance of the Evening Doji Star pattern conducted by Bulkowski, this candlestick pattern has a 71% successful reversal rate.