Evening Star Pattern Strategy (Python)

The Evening Star mirrors the Morning Star but indicates a potential top. It begins with a strong bullish candle, followed by a small indecision candle, and ends with a bearish candle closing below the midpoint of the first bar. The algorithm watches sequences of three candles. When the pattern forms, it enters short with a stop above the small middle candle's high. Positions exit once price drops beneath the confirmation candle's low or if the stop is triggered. Since the setup anticipates a quick reversal from overbought conditions, trades typically aim for short, momentum-driven moves lower.

• Entry Criteria: Three-candle Evening Star pattern.

• Long/Short: Short only.

• Exit Criteria: Price below confirmation bar low or stop-loss.

• Stops: Yes, above middle candle high.

• Default Values:

• CandleType = 5 minute

• StopLossPercent = 1 [*]Filters:

• Category: Pattern

• Direction: Short

• Indicators: Candlestick

• Stops: Yes

• Complexity: Intermediate

• Timeframe: Intraday

• Seasonality: No

• Neural networks: No

• Divergence: No

• Risk level: Medium