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Shooting star (candlestick pattern)
Encyclopedia
The shooting star is a type of bearish reversal pattern. The Shooting Star looks exactly the same as the Inverted hammer
, but instead of being found in a downtrend it is found in an uptrend and thus has different implications. Like the Inverted hammer
it is made up of a candle with a small lower body, little or no lower wick, and a long upper wick that is at least two times the size of the lower body.
The long upper wick of the candlestick pattern
indicates that the buyers drove prices up at some point during the period in which the candle was formed but encountered selling pressure which drove prices back down for the period to close near to where they opened. As this occurred in an uptrend the selling pressure is seen as a potential reversal sign. When encountering this pattern traders will look for a lower open on the next period before considering the pattern valid and potentially including it in their trading strategy.
As with the Inverted hammer
most traders will see a longer wick as a sign of a greater potential reversal and like to see an increase in volume on the day the Shooting Star forms.
Inverted hammer
The Inverted Hammer is a type of bullish reversal pattern. As its name implies, the Inverted Hammer looks like an upside down version of the hammer candlestick pattern...
, but instead of being found in a downtrend it is found in an uptrend and thus has different implications. Like the Inverted hammer
Inverted hammer
The Inverted Hammer is a type of bullish reversal pattern. As its name implies, the Inverted Hammer looks like an upside down version of the hammer candlestick pattern...
it is made up of a candle with a small lower body, little or no lower wick, and a long upper wick that is at least two times the size of the lower body.
The long upper wick of the candlestick pattern
Candlestick pattern
This page provides a brief introduction to 42 patterns of Japanese Candlesticks Chart. Candlestick pattern recognition is subjective and programs that are used for charting must rely on predefined rules.- History :...
indicates that the buyers drove prices up at some point during the period in which the candle was formed but encountered selling pressure which drove prices back down for the period to close near to where they opened. As this occurred in an uptrend the selling pressure is seen as a potential reversal sign. When encountering this pattern traders will look for a lower open on the next period before considering the pattern valid and potentially including it in their trading strategy.
As with the Inverted hammer
Inverted hammer
The Inverted Hammer is a type of bullish reversal pattern. As its name implies, the Inverted Hammer looks like an upside down version of the hammer candlestick pattern...
most traders will see a longer wick as a sign of a greater potential reversal and like to see an increase in volume on the day the Shooting Star forms.
See also
- Inverted hammerInverted hammerThe Inverted Hammer is a type of bullish reversal pattern. As its name implies, the Inverted Hammer looks like an upside down version of the hammer candlestick pattern...
— Shooting star pattern found in a downtrend - Shooting Star Information at candlecharts.com
External links
- Shooting star pattern at onlinetradingconcepts.com
- Bearish Shooting star at candlesticker.com
- Shooting star definition at investopedia.com