Did the third close surrender more than half the first body's rise?
Reveal the worked answer
Yes; 100.50 is below the 101.50 midpoint.
Calculate from the supplied OHLC, then distinguish geometry from the uncertain future.
Technical Analysis · TA-02f · Core
Evening star
How do you recognize evening star without treating it as an automatic entry?
What you will learn and prerequisites
- Read the exact candle geometry.
- Identify prior context.
- State a confirming and an invalidating branch.
Read first: Market structure comes first, Candlestick anatomy and the ten-pattern path
An evening star is the bearish mirror of the morning-star sequence: a strong bullish body, a small-bodied hesitation and a bearish giveback. A pause alone does not establish reversal; the third interval adds different evidence.
Put location before the name
The fictional setup occurs after a mature rise into a premarked 104–105 resistance region. That reference must be known before identifying the signal; otherwise a trader can invent convenient support or resistance afterward. Match the pattern's timeframe with the context timeframe and state when the bars finish.
The illustration is an original teaching sequence, not an alert, backtest or historical probability. The user's candle panel supplies the syllabus, not a specification for automated trading thresholds.
Read the geometry
The first body rises from 99 to 104, with midpoint 101.50. The third close at 100.50 gives back more than half that body. The second body is small near the high. Gap conventions depend on the instrument and session definition.
Walk both next-bar branches
A confirming branch for this particular process is a later close below 99.80 with an unsuccessful recovery of the lost area. An invalidating branch is a sustained reclaim above the middle candle's 105 high. Write both before watching the next interval. Confirmation is additional evidence, not certainty; failure means the original premise needs reassessment.
Even a visually confirmed pattern can offer poor execution economics. Check the next obstacle, spread, available liquidity and consequence of a failed entry. A bullish candle does not automatically justify buying an expensive call, and a bearish one does not justify uncovered short calls.
Read the completed bars
Use these exact data: bar 1: open 99.00, high 104.30, low 98.80, close 104.00; bar 2: open 104.20, high 105.00, low 103.80, close 104.40; bar 3: open 104.00, high 104.20, low 99.80, close 100.50. Begin with open and close, then inspect the shadows. Compare completed intervals; do not assume a particular high–low order within one interval.
The first body rises from 99 to 104, with midpoint 101.50. The third close at 100.50 gives back more than half that body. The second body is small near the high. Gap conventions depend on the instrument and session definition.
Now rehearse the favorable and adverse branches above. Explain what would change your confidence without changing the already-completed candle. The chart and popup use this same OHLC sequence, so the lesson can be reproduced numerically rather than memorized from a decorative drawing.
Open the calculation without leaving this lesson
Evening star—fictional completed intervals
Vertical: USD per share
Horizontal: Completed interval
Hollow body: close at or above open. Filled body: close below open. Neither color is a trade instruction.
Read the graph as a data table
| Interval | Open | High | Low | Close |
|---|---|---|---|---|
| 1 | 99 | 104.3 | 98.8 | 104 |
| 2 | 104.2 | 105 | 103.8 | 104.4 |
| 3 | 104 | 104.2 | 99.8 | 100.5 |
The named shape is not a guarantee
The adverse branch is a sustained reclaim above the middle candle's 105 high. Maintaining the original label does not restore the premise. A similar-looking candle in the middle of overlapping range trade may have much less useful context.
Another failure is hindsight selection: locating only successful examples after seeing their outcomes. A usable process needs stated definitions, transaction costs and out-of-sample evaluation before any claimed edge.
Check your understanding
Try the question before revealing its answer. These are reading checks, not trading certification or a site completion record.
Does this pattern establish a profitable options entry?
Reveal the worked answer
No.
Instrument price, time, liquidity and the loss scenario must also be evaluated.
Recognize the evening star, locate it, and explain both confirmation and failure before discussing a trade.
Sources, assumptions and downloadable script
External references support definitions and conventions. Worked scenarios and prose are original. No current quotes or dealer inventory are claimed.
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