Just a short break before our next example.
I have not yet touched on stop losses - that is to come.
Not all evening stars work - some fail. Look at the chart below >>>
By
tymen1 at 2008-03-27
In this case we have 2 evening stars (highlighted) and the first one fails, ie the price action keeps going up. Even though we get a good entry on the 4th candle (green), the price keeps going up and eventually our stop loss is activated.
These cases, however, tend to be in the minority. The second evening star, (not quite a true evening star) although short of the BB, sends the price action down.