What is a Shooting Star Candlestick?
Shooting Star candlestick is a type of candlestick where the open low and close are roughly the same price; it is also has a long wick associated. Length of the wick should be at least twice of the size of the body.
Underlying Psychology of the Shooting Star
In this case,during the session buyers keep pushing the prices up. Towards the end of the session, suddenly sellers appeared and bought the price downwards that it closed near to open leaving a long upper shadow. This is the first sign of trend reversal in an uptrend.
Example of How to Use a Shooting Star
How to Trade Shooting Star
Decision: In case of Shooting Star,traders should start looking for selling opportunities, sell price should be around the close price of the candle.
Stop loss: What if the market reverse its direction after printing the shooting star ? The high of the candle will act as stop-loss in case that happen.
Main Points to Consider
- Shooting star with long upper shadow and volume works better.
- If Shooting star appears after a uptrend,at resistance or after a Long white Maburozu candle, odd moves in your favor.
Beginner in Candlestick? Checkout below articles
- How to Identify Hanging Man Candlestick pattern and Trade it.
- How to Identify White Opening Marubozu and trade it.
- How to Identify Black Closing Marubozu and Trade accordingly.
Hope is a bogus emotion that only cost you money.Jim Cramer