Simple Strategy to Trade Cryptocurrencies following the Evening Star Candlestick Pattern
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Assalam-o-Alaikum Steemians !
I'm @moneyster, a professional level Cryptocurrency investor and an analyzer. As usual, today I thought to share another Crypto-related experience with you. I hope this article will be considerably beneficial for all the Steemians in this community
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Evening Star Candlestick Pattern is another Powerful Candlestick Pattern that we can use especially in a Trending Market. Because this type of Candlestick pattern mostly occurs during an Uptrend as a result of a Sell signal. However, it can also occur as a result of consolidation during an Uptrend.
When we talk about the appearance of this Evening Star Candlestick Pattern, we can clearly see there are 3 candles to form an evening Star Candlestick Pattern. Som the first candle always should be a strong Bullish candle and the second candle should be formed as a clear Dogi candle. Then the last candle is a strong bearish candle and it should be extended at least half of the first candle.
Now let's come to the working principle of this Evening Star Candlestick Pattern. As I said before, this Evening Star Candlestick Pattern is occurring in an Uptrend as a Trend reversal pattern. So, after confirming such Evening Star Candlestick Pattern in the chart, we can clearly take entry when the next candle breaks the lower wick of the last candle of the Evening Star Candlestick Pattern.
In an Evening Star Candlestick Pattern, we can place our Stop-Loss point in the Upper wick of the second candle (Doji Candle). This zone can be a considerable resistance zone to get higher accuracy. At the same time, here we can get a reward ratio of at least 1:1 or 1.5:1.
This Evening Star Candlestick Pattern is a very useful candlestick pattern, especially in higher time frames such as 4H and 1D. With the help of this Evening Star Candlestick Pattern, we can get higher selling opportunities in the Market during an Uptrend. So, this candlestick pattern demonstrates a good signal for a Market reversal from Bullish to bearish. Same as the other candlestick patterns, here we can easily find our stop loss zone to manage our risk at a certain level. However, it is better to choose a proper resistance zone to set our stop loss point in our Trading setup.
First of all, I will open BTC/USDT chart using the TradingView platform. Then we need to find the proper Evening Star Candlestick Pattern using the candlestick chart which consists of 3 candles one strong Bullish candle, a Doji Candle and a strong bearish candle.
Here the next candle after the Evening Star Candlestick Pattern should be a Red(Bearish) candle and it should break the Lower wick of the last candle of the Evening Star Candlestick Pattern to take our entry. I will further demonstrate it through the BTC/USDT chart.
Below I have demonstrated the Evening Star Candlestick Pattern as a result of a sell setup. Here we can see there are 3 candles that have been traded following the Evening Star Candlestick Pattern and the next candle has been traded below the lower wick of the 3rd candle of the Evening Star Candlestick Pattern. Then we can take our buy entry with the help of this trading setup. At the same time, we will be able to set the stop loss point by using the Upper wick of the Doji candle of the Evening Star Candlestick Pattern.
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In this way, we can easily use the Evening Star Candlestick Pattern to get better and more accessible trading opportunities. However, we can try to combine this strategy with some other indicators to increase the winning percentage.
At the same time, as I said in my previous article, we should remember that all the indicators and strategies are not efficient completely as nothing we can find 100% efficient in the world. So, we should depend only on these strategies and indicators to confirm our trading opportunities.
I have studied the below-sourced articles to study these topics further, and I have explained all the above facts in my own words and experience.
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Thank you @fredquantum for your cooperation. It means a lot to me.
This is very informative, thanks for sharing with us
You are most welcome. Of course, Evening Star Candlestick Pattern is doing a significant contribution to the Crypto Technical analysis field. Thank you very much for your response.
Another important lesson. You have done well in this task. Good luck to you
Thank you very much for your valuable feedback. It means a lot to me.
Nicely Done friend
Thank you very much for your feedback, my friend. It means a lot to me.