Shooting Star Candlestick Pattern Boost Your Trading Success Guide

  1. Technical Analysis
    1. How Technical Analysis Can Help You Make Informed Decisions in Mastering Stock Trading
    2. Technical Analysis Setting Realistic Expectations
    3. Introduction to Technical Analysis and Assumptions
    4. Technical analysis for Profitable Trades Analyzing Open, High, Low, and Close
    5. Candlestick Charts How Line and Bar chart Enhance Market Analysis
    6. Japanese Candlesticks History, Anatomy From Ancient Japan to Global Trading Phenomenon
    7. Time Frames in Technical Analysis Unlocking the Power of Choosing the Right Interval for Successful Trading strategy
    8. Candlestick Patterns How to Identify and Interpret Trading Signals
    9. Marubozu and Bullish Marubozu Understanding What is Essential Single Candlestick Patterns for Traders
    10. Marubozu Candlestick Setting Stop Loss The Ultimate Guide to Trading Patterns
    11. Spinning Top Candlestick Navigating Downtrends A Trader’s Guide to Identifying Reversal Signals
    12. Spinning Top and Doji How to Interpret and Navigating Market Uncertainty
    13. Paper umbrella and hammer candlestick pattern Unlock Profitable Trades
    14. Hanging man candlestick pattern Profitable share market trading Strategies
    15. Shooting Star Candlestick Pattern Boost Your Trading Success Guide
    16. Engulfing Patterns and Bullish Engulfing Signals Unlock Trading Opportunities
    17. Bearish Engulfing and Doji for Trading Success Profitable Strategies with Candlestick Patterns
    18. Multiple Candlestick Patterns Insights and Strategies Boost Your Trading
    19. Bullish Harami Candlestick Pattern for Trend Reversal Strategies
    20. Shorting Guide using the Bearish Harami Pattern Trade Reversals with Confidence
    21. Morning Star Candlestick Pattern and Gap Analysis To Maximise Your Profits
    22. Evening Star Candlestick Pattern Learn How to Identify and Trade to Boost Your Trading Success
    23. Support and Resistance Basics A Comprehensive Guide to Setting Targets and Navigate the Markets with Confidence
    24. Support and Resistance Learn How to Draw and Identify Key Levels Unlocking Trading Opportunities
    25. Support and Resistance Advanced Trading Strategy Analysing Reliability and Optimisation
    26. Volume Trends How to Leverage for Successful Trading Strategy
    27. Volume Analysis A Key Checklist for Successful Stock Trading
    28. Moving Averages A Comprehensive Guide for Trend Analysis in Stock Trading
    29. How to Use Moving Averages for Profitable Trading Strategy and Potential Opportunities
    30. Moving Average Crossover Boost Your Trading Success with A Reliable Strategy
    31. Technical indicators How to Use Technical Tools for Better Decision-Making Unlocking the Power of Trading
    32. Relative Strength Index RSI Analysing Overbought and Oversold Signals to Boost Your Trading Strategy
    33. MACD How to Interpret and Utilize Moving Average Convergence and Divergence for Profitable Trading
    34. Bollinger Bands The Power of Indicators in Trading and checklist
    35. Fibonacci Retracements Unravelling the Power in Stock Markets
    36. Mastering Fibonacci Retracement A Step-by-Step Guide for Effective Trading
    37. Dow Theory Decoding Unveiling the Principles of Technical Analysis
    38. Dow Theory Patterns Unlocking Trading Opportunities with Double and Triple Formations
    39. Trading Range Explained chart indicator example strategy Profit from Market Ranges
    40. Flag Pattern and Range Breakout How to Capitalise Trading Beyond Boundaries
    41. Risk reward ratio Understanding RRR in Dow Theory
    42. Technical Analysis Tools for Traders Charting Software Guide Enhance Your Trading
    43. How to Select Stocks for Trading Success and Building Your Opportunity Universe
    44. Short Term Trading Unleashing the Power of Scalping Strategies
    45. ADX Indicator and 7 more indicator tools for Trend Strength Analysis
Marketopedia / Technical Analysis / Shooting Star Candlestick Pattern Boost Your Trading Success Guide

The shooting star

The shooting star is the final single candlestick pattern we will cover before advancing to multiple patterns. It is a highly effective price action, so it is often used in trading.

The shooting star has the same appearance as an inverted paper umbrella.

A shooting star differs from a paper umbrella in that it has no lengthy lower shadow, instead having an upper shadow which is at least twice this size. 

The body colour is not essential, but the pattern does appear more reliable if red. 

The longer the upper wick, the more bearish. Both patterns include a small real body as part of their definition; however, sometimes a tiny lower shadow is accepted. The shooting star suggests the prior trend must have been bullish.

Here are the thought process behind the shooting star: 

– The stock is showing an upward trend, indicating that the bulls are firmly in charge. This usually leads to higher highs and even greater lows for the stock or market.

– On the day the shooting star pattern appears, the market trades higher, as anticipated, and creates a new all-time high.

– At the highest point of the day, selling pressure is visible as the stock price declines to close near its lowest point, creating what’s known as a shooting star.

– The signs suggest that bears have entered, as they have been able to bring prices down and create a long upper shadow.

– It is expected that the bears will continue to put pressure on the market over the coming trading sessions, providing potential shorting opportunities for traders.

Examine the chart where an impactful shooting star can be seen marking the top of an uptrend.

As already established, it’s best to let the trade run its course until either the stop loss or target is hit. Other than potentially trailing your stop loss, there’s no need to interfere with the trade. We’ll go over trailing stop losses in due time.

This chart suggests that both the risk-taker and risk-averse would have profited greatly from a trade based on a shooting star.

An example, where a shooting star was detected could have had both risk-averse and risk-taking traders entering the trade. Nevertheless, the stop loss was exceeded, so exiting is the desirable action here. Most of the time, when the stop-loss triggers, it is best to exit the trade.