A shooting star is a single-candle formation signaling a possible bearish reversal after an upward price move. It has a small body near the bottom of its range, no or very little lower wick, and a long upper shadow that indicates buyers drove the market higher but were eventually overpowered by sellers.
Our guide, created by WR Trading, explains what the shooting star represents, how to trade it, the difference between green and red variations, and how it compares to similar formations. The goal is to provide a user-friendly approach for beginners while still offering enough depth for experienced traders.
How Is The Shooting Star Pattern Structured:
- Construction: A single candle with a small real body near the low, a long upper wick, and little to no lower wick. It shows that the price was rejected from higher levels during an uptrend.
- Forecast: A bearish reversal is likely if confirmed by a strong red candle closing below the shooting star’s low.
- Type of Pattern: Single-candle bearish reversal pattern.
- Trend Prior to the Pattern: Forms after an uptrend, signaling a possible shift to downward momentum.
- Opposite Pattern: Inverted Hammer
- Stop-Loss Placement: Above the high of the shooting star’s wick to allow for price fluctuations while maintaining a favorable risk-to-reward ratio.
- Candlestick Success Rate: Around 54% – 71%
What Is A Green Shooting Star Pattern?
A green shooting star closes above its opening price, which can feel counterintuitive since the candle is thought of as a bearish indicator. However, the main point of this pattern is in the upper wick.
Even though buyers initially pushed the price up, the inability to keep it near those highs suggests waning bullish momentum. A green Shooting Star may be slightly less bearish than its red counterpart, but it can still function as a warning that the ongoing uptrend is under threat.
What Is A Red Shooting Star Pattern?
A red shooting star finishes below its opening price, making it a more openly bearish formation compared to a green version. Here, price opens, rallies higher, then closes under the open, leaving a small red real body near the candle’s low.
Confirmation still matters. Even a red shooting star, if not followed by a lower close, could end up being a false signal. Nonetheless, the red color shows that sellers pushed hard enough to drive the price below the open.
What Does A Shooting Star Candlestick Pattern Mean?
The shooting star points to a potential shift in sentiment after buyers have enjoyed a period of success. During the candle, the market looks bullish at first, but late-session selling reverses most or all of the earlier gains.
Moreover, from a psychological point of view, this abrupt pivot in control shows buyers are running out of steam and sellers may drive the price down further. This can compound as more traders see that pattern and place their sell orders.
However, one candle alone does not guarantee a reversal. Technical traders prefer to pair a shooting star with volume analysis, overbought readings on indicators like RSI, or notable resistance zones. Such additional layers boost the likelihood that the candle’s message is accurate.
How To Trade The Shooting Star Candlestick Pattern
The shooting star is a way to spot shifts in momentum after a bullish run. To trade it effectively, you need a method that connects market structure, candlestick analysis, and basic risk management. Here, you will find clear steps on identifying, confirming, and executing trades when this pattern emerges.
- Analyze the Market Environment
- Wait For The Appearance Of The Shooting Star
- Where Does The Shooting Star Candlestick Appear?
- Validate with Nearby Resistance or Overbought Indicators
- Wait for a Confirmation Candle
- Choose Your Trading Take Profit (Goal Of The Setup)
- Open Your Trade – Entry Point (Set Up Stop Loss / Positions Size)
Step 1: Analyze the Market Environment
Begin by looking at the broader context – has the market been steadily climbing for several sessions or weeks? A shooting star holds greater weight when it appears after a discernible uptrend. Check if there are prior swing highs that could function as resistance, or if the price is nearing a significant round number.
Many traders first gauge momentum by observing a series of higher highs and higher lows on the chart. Such a structure indicates a bullish phase. If the shooting star appears in a sideways or choppy environment, it might not carry the same potential for a meaningful reversal, since the price lacks a strong preceding rally to reverse from.
Step 2: Wait For The Appearance Of The Shooting Star
Next, remain alert for the candle to print on your chosen timeframe. A valid shooting star has a small body near its low and a long upper wick, showing the battle between buyers and sellers.
During the session, buyers initially appear dominant, forcing the price above the open. However, once the candle closes, if the body is substantially closer to the session’s low, it reveals that sellers succeeded in getting control from buyers near the top. The elongated upper wick shows just how much ground the bears reclaimed by the end.
Sometimes, traders try to predict the pattern before the candle even closes, but that’s risky. Letting the daily, 4-hour, or chosen time frame candle finish ensures you see the final real body placement and wick length. Premature action might lead you to enter a short position without the actual confirmation that the price rejected higher levels.
Once the candle prints, evaluate its structure. Is the wick long enough – at least twice the body size? Does it occur near a notable resistance or an exhaustion gap? The more factors aligning with the shooting star, the more compelling it becomes.
Step 3: Where Does The Shooting Star Candlestick Appear?
The shooting star is most effective when it forms after a clear upward price movement. Its appearance near the top of an uptrend signals that buying momentum may be fading and sellers are beginning to step in. Without a meaningful rise beforehand, the pattern loses context and carries much less weight as a potential reversal signal.
- In an Uptrend: The shooting star works best and can appear at the top of a sustained bullish move when the price is testing a resistance level or psychological price point. The long upper wick shows buyers tried to push higher but were quickly overwhelmed by selling pressure near the session’s close.
- During a Pullback in a Downtrend: Occasionally, the pattern can appear during a brief rally within a larger downtrend. When this happens near a resistance level, it may signal that the bounce is losing strength and the broader bearish move is about to resume.
Step 4: Validate with Nearby Resistance or Overbought Indicators
Check if the candle forms near a well-established resistance line, a Fibonacci extension, or a cluster of prior highs. Any of these elements can amplify the candle’s bearish significance. Also, look for overbought signals from indicators like RSI – values above 70 or 80 may suggest the market is ripe for a downturn.
Step 5: Wait for a Confirmation Candle
Should the subsequent candle open weak and finish below the shooting star’s low, the bearish scenario gains credibility. This behavior indicates that sellers have followed through, rather than letting the price bounce back. Entering a short position upon or after this confirmation helps avoid jumping in too soon.
However, if the price stays flat or pushes above the shooting star’s high, you may want to hold off. This lack of follow-up often implies that bears weren’t as committed as the pattern suggested.
Step 6: Choose Your Trading Take Profit (Goal Of The Setup)
Short-selling a shooting star revolves around capitalizing on a potential downturn, so you’ll want a well-defined goal. Some opt for technical levels like the last swing low, while others use a percentage-based approach. Although the method is flexible, clarity is important: set your exit in advance to avoid emotional decision-making if the price quickly dips or experiences sharp volatility.
Moreover, consider partial profit-taking if the price descends, then look to lock in the remainder if momentum stays strong. This layered exit approach suits traders who want to secure gains while retaining an open position in case the down-move extends.
Step 7: Open Your Trade – Entry Point (Set Up Stop Loss / Positions Size)
After spotting the shooting star and defining your risk and targets, opening the trade becomes more straightforward. Many traders place a sell stop just below the candle’s low, triggering entry when the price breaks under it. Others wait for a retest of that area to confirm resistance holds. Either method can work if it aligns with the overall plan.
Stop-loss orders generally sit just above the shooting star’s wick. This boundary helps differentiate between a legitimate failure of the pattern and normal volatility. Position size is then calculated so that if the stop is hit, the loss remains within your chosen limit, commonly 1-2% of account equity per trade.
What Are The Pros And Cons Of Trading The Shooting Star?
As a trader, it’s important to understand the advantages and disadvantages of candlestick patterns. We’ve broken them down in detail in the section below.
Pros
- Can appear on any timeframe
- Often aligns with psychological round numbers
- Offers a clear indication of potential trend exhaustion
- Provides a well-defined stop-loss location above the wick
- Works in multiple asset classes, like stocks, forex, crypto, and more
- Easy to spot
- Easy to integrate into various trading strategies
- Aids in spotting profitable reversal opportunities
- Simple design makes it suitable for beginners
- Can be combined with trading strategies on WR Trading
Cons
- Can generate false signals if not confirmed by follow-up candles
- May be overshadowed by high-impact news or events
- Requires strong placement at resistance to be more reliable
- Can be invalidated quickly in volatile markets
- Potential confusion for beginners with other similar candlesticks
- Over-reliance on the pattern alone might lead to poor entries
- May fail if volume is too low, indicating weak selling interest
- The pattern can form in sideways markets where signals are less meaningful
- Entry timing can be challenging if the candle forms late in the session
- Not every shooting star is valid if it lacks a strong upper wick
What Is The Hit Rate Of The Shooting Star Candlestick Pattern?
The success rate of the Shooting Star Candlestick Pattern can be around 54 – 71%. Just like other candlestick formations, the shooting star’s success rate can vary based on context, timeframes, and confirmation. Experienced traders note that it performs best on higher time frames, 4-hour, daily, and weekly, where noise is lower. Intraday charts might generate repeated patterns, some of which lack genuine follow-through.
How Accurate Is The Shooting Star Pattern?
Research from multiple candlestick analysts, such as Thomas Bulkowski’s Encyclopedia of Candlestick Charts and Steve Nison’s Japanese Candlestick Charting Techniques, places the shooting star’s success rate around 55% to 65% when aligned with a strong uptrend and validated by subsequent bearish action. To improve accuracy, it helps to see heavier selling volume accompanying the candle, highlighting that sellers were genuinely active at the elevated price levels.
Is The Shooting Star Pattern Bullish Or Bearish?
The shooting star is bearish because it appears after a price rise and features a strong rejection of higher values. Buyers who were pushing the market upward fail to maintain those gains, making the way for potential downside pressure.
However, the candle’s color isn’t always red; a green shooting star can still indicate weakness if the wick is large and the following candle closes lower. The common theme is that the upward momentum runs into difficulty, signaling a possible turning point.
What Is An Inverted Shooting Star Candlestick Pattern?
An Inverted Shooting Star refers to a candle that comes in a downtrend, presenting a small real body near the candle’s low and a long upper wick. Some traders call this formation an Inverted Hammer, which points toward a potential bullish reversal instead of a bearish one.
Unlike a standard shooting star that warns of a downward turn after a price run-up, the inverted shooting star suggests buyers tried to push the market higher from a lower level. If confirmed, it may show that sellers are losing grip and a rebound could happen.
Can The Shooting Star Pattern Have Failure Signals?
Yes, despite being a commonly used bearish reversal signal, the shooting star is not always reliable on its own. Several market factors can weaken or completely invalidate the setup, leading to false signals.
- Close Above the Wick: If subsequent price action drives the candle above the Shooting Star’s high and closes there, it negates the indication of bearish control. This outcome implies that the market overcame the pattern’s resistance.
- Weak Volume During Formation: When the shooting star prints on extremely low volume, it could be more a sign of temporary seller fatigue from buyers rather than genuine selling pressure. If volume doesn’t pick up afterward, the signal becomes questionable.
- Forming in Lackluster Market Conditions: In flat or directionless markets, price fluctuations can create many misleading candles. A shooting star in a non-trend market might reflect normal back-and-forth moves rather than a strong reversal.
- Immediate Bullish News: Sudden announcements like corporate earnings and policy changes can overpower technical signals. Even the best-formed shooting star can fail if the market receives a positive jolt soon after its appearance.
- Not at a Key Resistance: Shooting stars placed randomly on the chart without a recognized ceiling or overbought indication are less convincing. The pattern generally needs a logical price barrier to amplify its meaning.
- Absence of Confirmation: A shooting star that isn’t followed by a lower close or consistent selling can become a stand-alone candle with no real impact. Experienced traders often wait for at least one negative candle to confirm the shift.
Possible Strategies For The Shooting Star Pattern
The shooting star works best when paired with a smart strategy – not just spotted in isolation. These are some aspects you can add to your trading strategy to make this pattern formation more profitable:
- Reversal at Major Resistance: This strategy involves waiting for the pattern to form at a well-known resistance level or near a round number. Once a shooting star is confirmed by a lower closing candle, place a short entry with a stop-loss above the wick. Profits are often aimed at the nearest support or a measured risk-to-reward ratio.
- Pullback in a Downtrend: Traders following a larger downward move watch for relief rallies that form shooting stars. The pattern becomes a signal to jump back into the downtrend. After confirmation, a short position is opened near the candle’s low or upon a slight pullback. Stops go above the shooting star’s high, and targets vary based on previous swing lows or important levels.
- Multiple Timeframe Confirmation: By checking higher timeframes for overarching direction and then spotting a shooting star on a lower timeframe, traders align short entries with the broader market climate. A shooting star that matches larger-scale resistance tends to offer higher probability entries.
- Momentum Indicator Filters: Adding RSI, Stochastics, or MACD can help filter out weak patterns. For example, if the shooting star appears while RSI is reading above 70, it may validate that the market is extended. A breakdown on lower timeframes would then serve as an actionable short setup.
Alternatives To The Shooting Star Pattern
| Pattern | Type | Average Success Rate | Key Characteristic / Conidtion |
|---|---|---|---|
| Inverted Hammer | Reversal (Bullish) | 54% – 70% | Similar shape but after a downtrend; long upper wick indicates potential upside reversal. |
| Hammer | Reversal (Bullish) | 55% – 72% | Bullish version of Shooting Star, long lower wick forms after a downtrend. |
| Evening Star | Reversal (Bearish) | 55% – 68% | Three-candle formation signaling a peak in prices. |
| Hanging Man | Reversal (Bearish) | 37,2 – 86% | Similar to a Hammer but appears after an uptrend, small body with a long lower wick. |
| Tweezer Top | Reversal (Bearish) | 60% – 65% | Two consecutive candles with matching highs, rejecting a similar price level. |
Shooting Star vs Evening Star vs Morning Star Pattern
The shooting star, evening star, and morning star are all popular candlestick patterns that signal a potential change in market direction, but they differ in structure, context, and interpretation. The shooting star and evening star both suggest a bearish reversal after an upward price move, while the morning star indicates a potential bullish reversal following a decline.
What sets them apart is the number of candles involved and how the reversal signal unfolds. The shooting star is a single-candle formation, offering a more immediate visual cue of rejection from higher prices.
Meanwhile, the evening star and morning star are three-candle formations that take more time to develop but often provide more confirmation through their structure. All three patterns are widely used and carry different strengths depending on the situation and the chart context.
| Information | Shooting Star | Evening Star | Morning Star |
|---|---|---|---|
| Construction | One Candle: A bullish candle preceding the shooting star, often large-bodied. | First Candle: A large bullish candle continuing the existing uptrend.Second Candle: A small-bodied candle (often indecision or a doji) showing a pause. Third Candle: A strong bearish candle closing below the midpoint of the first candle. | First Candle: A large bearish candle continuing the existing downtrend.Second Candle: A small-bodied candle that represents indecision (can be bullish, bearish, or a doji).Third Candle: A strong bullish candle closing above the midpoint of the first candle. |
| Forecast | A bearish reversal is likely if confirmed by a strong red candle closing below the shooting star’s low. | A bearish reversal is likely if confirmed by a strong red candle following through downward. | A bullish reversal is likely if confirmed by a strong green candle continuing higher. |
| Type of Pattern | Single-candle bearish reversal pattern. | Three-candle bearish reversal pattern. | Three-candle bullish reversal pattern. |
| Trend Prior to the Pattern | Forms after an uptrend, signaling a possible downward reversal. | Forms at the top of an uptrend, signaling a potential downward reversal. | Appears at the bottom of a downtrend, indicating a potential upward reversal. |
| Opposite Pattern | Inverted Hammer | Morning Star | Evening Star |
Hanging Man vs Shooting Star candlestick Pattern
The hanging man and shooting star can appear similar but differ in the shape of their wicks and the market psychology they reflect. The hanging man has a long lower wick and appears in an uptrend, while the shooting star has a long upper wick and also forms after a price rise. Both point toward a potential top, yet the mechanics behind each can vary.
Market participants see the hanging man as a candle where sellers made progress earlier in the session, then buyers pulled the price back to near the open. With a shooting star, buyers initially push the price higher, only to be met by selling that forces the close near the open. In both cases, the final location of the body reveals that bullish momentum may be faltering.
| Information | Hanging Man | Shooting Star |
|---|---|---|
| Construction | Single candle with a small body near the top, a long lower wick, and little to no upper wick. Often comes after larger bullish candles. | Single candle with a small body near the bottom, a long upper wick, and little to no lower wick. Appears after bullish price bars. |
| Forecast | Potential bearish reversal if confirmed by a lower close on the next candle. | Potential bearish reversal if confirmed by a down candle closing below its low. |
| Type of Pattern | Single-candle bearish signal | Single-candle bearish signal |
| Trend Prior to the Pattern | Forms after an uptrend, suggesting a possible fade in buying interest. | Forms following an uptrend, hinting that sellers are stepping in at higher levels. |
| Opposite Pattern | Hammer | Inverted Hammer |
Learn Pattern Trading With The WR Trading Mentoring
WT Trading Mentoring helps traders gain a practical understanding of market structure, candlestick formations, and the mindset needed to execute trades calmly. The program emphasizes real chart scenarios, avoiding unnecessary complexity or unrealistic promises. Students study how patterns like the shooting star fit into a broader system, learning to be selective and consistent.
The guides focus on easy-to-follow step-by-step methods. They explain how to evaluate confluences, when to use certain patterns, and how to keep losses under control when trades don’t go as planned. It’s an organized environment for refining your approach. If you’re eager to develop solid techniques, the WR Trading Mentoring sessions can be a meaningful next step toward growth and consistency.
Conclusion: The Shooting Star Candlestick Pattern Is Suitable for Trading Bullish Reversals
The Shooting Star is a straightforward candle formation that warns traders about possible weakness after a bullish run. While one candle on its own cannot guarantee a lasting reversal, it does provide a strong visual clue that buyers have struggled to maintain higher prices. For those who want to improve the odds of success, pairing this pattern with well-defined resistance zones, momentum indicators, and volume analysis can increase its reliability.
Adding the shooting star to your toolkit can help you spot potential turning points and plan trades with balanced risk. If you’d like to deepen your understanding of this pattern and learn to apply it in live markets, you should consider joining WR Trading for more personalized guidance and educational programs.
Frequently Asked Questions on Shooting Star Candlesticks:
Is the Shooting Star Only Valid on Daily Charts?
No, it can be found on any timeframe, but many traders prefer daily or 4-hour charts for better reliability. Smaller timeframes often have more noise, making patterns less clear. In general, higher timeframes tend to produce more reliable signals.
Does the Color of the Shooting Star Candle Matter a Lot?
Yes, the color can offer slight hints, as a red candle often shows a stronger rejection than a green one. However, the upper wick’s length and subsequent confirmation carry more importance. Even a green Shooting Star can indicate weakening momentum if the wick is large enough.
What if a Shooting Star Appears in a Sideways Market?
In flat conditions, the pattern can be less meaningful since there is no strong prior trend to reverse. Many traders skip these setups unless another factor suggests a larger shift. Context is key for every candlestick pattern.
Is a Shooting Star More Reliable With High Volume?
Yes, higher volume shows sellers aggressively pushed the price down from the candle’s peak. This added conviction can strengthen the case for a short setup. Low-volume shooting stars may not be as impactful.
Why Does the Wick Have to Be So Long in a Shooting Star?
A lengthy upper wick emphasizes that buyers drove the price much higher than the open before being repelled. This behavior reveals a shift from buying to selling. A shorter wick may not indicate the same level of rejection.
