Shooting Star
A shooting star is a bearish reversal candlestick with a small body and a long upper shadow, indicating sellers rejected higher prices during an uptrend.
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How to Identify
The candle has a small body at the lower end of the trading range
The upper shadow is at least twice the length of the body
There is little or no lower shadow
The pattern appears after an uptrend or rally
The body color can be either red or green, though red is slightly more bearish
Trading Rules
Entry Rules
- Enter short on a bearish candle that follows and closes below the shooting star's low
- Confirm the pattern forms at a known resistance level
- Verify with above-average volume on the shooting star candle
Exit Rules
- Place stop-loss above the shooting star's upper shadow
- Target the nearest support level below
- Use a minimum 2:1 risk-reward ratio
Target the nearest support level. Alternatively, use the shooting star's total range as a minimum measured move from the entry point.
Place stop-loss above the high of the shooting star's upper shadow. This is the level that invalidates the rejection signal.
Success Rate
59% according to Bulkowski
Success rates vary based on market conditions, timeframe, and trader experience. Always validate patterns with your own journal data.
Journaling Tips
Record the upper shadow length relative to the body as longer shadows mean stronger rejection
Note the resistance level or zone where the shooting star formed
Track whether the confirmation candle was needed or if price reversed immediately
The shooting star is the bearish mirror image of the hammer. During the candle’s formation, buyers pushed price significantly higher, but sellers overwhelmed them and drove price back down near the open, creating a long upper shadow that signals potential reversal.
What the Shadow Tells You
The long upper shadow represents a failed rally attempt:
- Buyers pushed price to a new intraday high during the candle
- Sellers stepped in aggressively at those higher prices
- Selling pressure pushed price back down to near the open
- The resulting upper shadow shows rejected higher prices
This rejection is a powerful signal, especially at established resistance levels.
Best Conditions for Shooting Stars
The pattern is most reliable when:
- At resistance: The shooting star forms at a horizontal resistance level, trendline, or round number
- After an extended move: The longer the preceding uptrend, the more significant the exhaustion signal
- With volume: High volume on the shooting star shows significant participation in the rejection
- With divergence: RSI or MACD divergence adds conviction to the reversal thesis
Confirmation Protocol
Wait for the next candle to close below the shooting star’s low before entering short. This confirmation step filters out a significant number of false signals.
Some traders use a more aggressive approach: enter at the open of the next candle if it opens near or below the shooting star’s close. This provides a better entry but carries more risk.
Risk Management
The stop-loss goes above the shooting star’s high. This can create a wide stop if the shadow is very long. In these cases:
- Reduce position size to maintain consistent risk
- Or wait for a retest of the shooting star area for a tighter entry
Journal Integration
Track each shooting star trade with attention to shadow length, resistance context, and volume. Over time, your journal will reveal whether longer shadows, specific resistance types, or certain timeframes produce better results for your shooting star trades.
Common Mistakes
Trading every shooting star without context, leading to many false signals in strong uptrends
Entering on the shooting star candle without waiting for bearish confirmation
Placing stops too tight, not accounting for the full shadow range
Frequently Asked Questions
What is the difference between a shooting star and an inverted hammer?
They have the same shape but different context. A shooting star forms after an uptrend and is bearish. An inverted hammer forms after a downtrend and is potentially bullish. The preceding trend determines the interpretation.
How long should the upper shadow be?
The upper shadow should be at least twice the length of the body for a valid shooting star. Shadows that are three times the body or longer indicate stronger rejection and tend to produce better reversal signals.
Can shooting stars work on intraday charts?
Yes, but they are more reliable on 4-hour and daily charts. Intraday shooting stars produce more false signals due to market noise. Always confirm with context regardless of timeframe.
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