Shooting Star Pattern


In the fast-paced world of trading, recognising key chart patterns is crucial for informed decision-making. One pattern that traders often look for is the shooting star trading pattern. This article will delve into what a shooting star pattern is, how to spot it on a chart, its associated trading strategies, and its distinctions from similar patterns.

What Is a Shooting Star?

A shooting star in trading is a bearish candlestick pattern that can signify a potential reversal of an uptrend. It consists of a single candlestick with the following characteristics:

  • A small body that is located at the lower end of the candlestick.
  • A long upper shadow or wick that is at least twice the length of the candle's body.
  • A short or nonexistent lower shadow.

The appearance of the setup suggests that the price opened near its low and rallied significantly during the trading session but ultimately closed near its opening price. This pattern indicates sellers regained control after a brief period of bullishness.

How to Spot a Shooting Star in the Chart

Identifying a shooting star forex pattern or finding one in other financial instruments involves paying attention to the following points:

  • Look for an existing uptrend: Before a shooting star appears in the chart, there should be a prevailing uptrend in the market.
  • Spot the setup: Search for a single candlestick with a small body, a long upper shadow, and little to no lower shadow. The upper shadow should be notably longer than the body.

How to Trade the Shooting Star

The shooting star trading strategy involves the following key points:

  • Entry: After identifying the candle, consider entering a short position. This means selling the asset in anticipation of a price decline. It may help to wait for the next one or two candles to close below the shooting star bar for additional confirmation.
  • Take Profit: You may set a take profit level based on technical analysis, such as the support level, Fibonacci retracement level, or nearest swing lows.
  • Stop Loss: You may want to protect your position with a stop-loss order. This is usually placed above the high of the shooting star. This helps limit potential losses if the pattern doesn't lead to a reversal.

Let's consider a live market example of a shooting star in the stock market to illustrate the concept. A trader analyses the Meta stock chart on the TickTrader platform by FXOpen and spots a shooting star stock pattern after an extended uptrend. They wait for confirmation, i.e. for the next bar to close below the setup. Upon confirmation, they decide to enter a short trade, setting their take-profit level at a significant support point and placing a stop loss above the formation’s high.

Shooting Star vs Inverted Hammer

The shooting star and inverted hammer look similar – they have small bodies and long upper shadows. However, they differ in their implications. The former is a bearish reversal pattern found in uptrends, while the latter is a bullish reversal formation seen in downtrends.

Shooting Star vs Evening Star

Both formations signal an uptrend reversal; however, the shooting star is a single-candle setup, whereas the evening star consists of three candles, including a large bullish candle, a small-bodied candle, and a large bearish candle.

Final Thoughts

Understanding chart patterns like the shooting star is essential for making informed decisions in trading. Remember that while this formation can provide valuable insights, it is more effective in conjunction with other tools for signal confirmation. As a trader, staying informed about market developments and continuously honing your skills could be a key to potential success in the dynamic trading environment. You may open an FXOpen account to practise on demo and live portfolios on a variety of markets.


Can candlestick patterns guarantee profitable trades?

No, candlesticks do not guarantee profitable trades. While they provide valuable insights, trading involves risk, and market conditions can change rapidly. It's crucial to use proper risk management and consider other factors, such as fundamental factors and market context.

Can candlestick patterns be time-sensitive?

Yes, candlestick patterns vary in terms of their timeframes. Some patterns, like the shooting star, are short-term, while others, like the double top, have longer-term implications. The choice of timeframe goes hand in hand with your market strategy and goals.

How to improve candlestick pattern recognition skills

Improving your candlestick pattern recognition skills requires practice and study. You can analyse historical charts, use trading simulators, read educational materials, and engage with experienced traders to gain insights and practical experience.

It is essential to note that sound trading involves continuous learning, discipline, and risk management. Candlestick patterns are valuable tools but they should be used with a well-rounded trading approach.

Why are candlestick patterns important in trading?

Candlesticks visually represent price action and help traders identify potential trend reversals, continuations, and key support and resistance levels. They are valuable tools for technical analysis.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Trader’s Tools

What Is the Wolfe Wave, and How Can You Trade It? Analytical XRP Price Forecasts: What Are the Expectations for 2024-2030? What Is a Liquidity Sweep and How Can You Use It in Trading? What Is the VIX Index, and How Is It Used in Trading? USD to CAD Analytical Predictions in 2024, 2025 and Beyond

Latest articles

Financial Market News

Weekly Market Wrap With Gary Thomson: S&P500, US Dollar, Gold Price, PEP Stocks

Get he latest scoop on the week's hottest headlines, all in one convenient video. Join Gary Thomson, the COO of FXOpen UK, as he breaks down the most significant news reports and shares his expert insights. Read the latest news


The Price of Silver Has Reached Its Highest Level in Over Three Years

As indicated by the XAG/USD chart today, the intraday price of silver reached $29.84 per ounce yesterday, while the previous yearly high on 12 April was $29.79. The last time this price was seen was in February

What Is the Wolfe Wave, and How Can You Trade It?
Trader’s Tools

What Is the Wolfe Wave, and How Can You Trade It?

The Wolfe Waves is a powerful chart pattern recognised for analysing potential price reversals. Named after Bill Wolfe, who developed this formation through extensive trading practice, Wolfe Waves provide traders with a structured approach to anticipate market movements. In this

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.