What is Shooting Star forex strategy?

Shooting Star Forex Strategy. The Shooting Star forex strategy is made up of one reversal candlestick pattern and one exponential moving average for trend direction. This is a great reversal strategy used to trade short-term rallies found in a bearish market.

What is a “shooting star”?

As a “Shooting Star”, it makes sense for the signal to occur high up after the price has gone up sky high. The candlestick must have a short body. The lower shadow should not exist or be very small. The upper shadow (which conveys the extent of the price movement) must be tall, at least twice the length of the body.

What is an inverted Shooting Star?

The inverted shooting star is a bullish analysis tool, looking to notice market divergence from a previously bearish trend to a bullish rally. An inverted shooting star pattern is more commonly known as an inverted hammer candlestick. It can be recognized from a long upper shadow and tight open, close, and low prices — just like the shooting star.

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.