What is a shooting star Candlestick?

The Shooting formation is created when the open, low, and close are roughly the same price. Also, there is a long upper shadow, generally defined as at least twice the length of the real body. You can learn about ‘real body’ in our Candlesticks Basics Guide. When the low and the close are the same, a bearish Shooting Star candlestick is formed.

How to trade a shooting star candle pattern?

Before trading with the shooting star, one should remember the following points: Trade Entry: Before you enter a shooting star trade, you should confirm that the prior trend is an active bullish trend. Stop Loss: You should always try to use a stop-loss order when trading the shooting star candle pattern.

What is the difference between inverted hammer and Shooting Star Candlestick?

The inverted hammer and the shooting star candlestick have the same appearance. Both exhibit long upper shadows and little real bodies near the candle’s low point, with little or no bottom shadow. The context in which they appear brings out the difference. A shooting star appears after a price gain and indicates a potential price downtrend.

Can a shooting star Candlestick retrace a reversal?

Keep in mind that the shooting star candlestick should never be viewed in isolation. Before acting on the formation, confirm the signal using technical indicators. For example, if you think that a shooting star at the top of an uptrend means possible reversal, you can test the bearish bias using Fibonacci retracement.