Shooting Star Candlestick — Complete Trading Guide (Pattern, Meaning & Strategy)
Learn how the Shooting Star pattern reveals potential bearish reversals, its psychology, key setups, and practical trade rules.
The Shooting Star candlestick is one of the most reliable single-bar reversal signals in price action trading. It appears after an uptrend and indicates that bullish momentum may be fading while sellers begin to take control.
What is a Shooting Star?
- Small real body near the low of the candle
- Long upper shadow at least twice the size of the body
- Little or no lower shadow
- Forms after a price advance or uptrend
Visually, it looks like an inverted hammer. But its meaning differs: while the hammer forms after a downtrend, the Shooting Star appears at market tops, hinting at bearish reversal.
Psychology Behind the Pattern
During the session, buyers push price significantly higher (creating a long upper wick). However, they fail to hold gains, and sellers drive the close back near the open. This shift shows exhaustion of bullish power and early signs of distribution.
Market Context Matters
The Shooting Star’s reliability increases when it occurs:
- After a strong rally or parabolic move
- At or near major resistance, supply zone, or Fibonacci extension
- On high volume — suggesting real selling pressure
- Alongside overbought indicators (RSI > 70, etc.)
Trading the Shooting Star Pattern
Conservative Entry Rules
- Wait for the candle to close — don’t enter mid-formation.
- Confirm with the next bar closing below the Shooting Star’s low.
- Enter short after confirmation close or on minor retrace.
- Stop-loss: above the Shooting Star’s high.
- Target: 2× risk or next support zone.
Aggressive Entry Rules
Advanced traders sometimes enter immediately when price breaks the Shooting Star’s low intrabar. This approach demands tight risk control and quick reaction to false breaks.
Volume and Confirmation
High volume during the Shooting Star suggests strong rejection. Combine it with trendline breaks or bearish divergence for better accuracy.
Example Trade Setup
Risk Management Checklist
- Never trade a single candle blindly — use confluence.
- Position size based on distance between entry and stop-loss.
- Consider partial profit near 1R, move stop to breakeven, and trail remainder.
Common Mistakes to Avoid
- Trading every Shooting Star — context is everything.
- Ignoring trend direction on higher timeframes.
- Failing to wait for confirmation candle.
- Setting stops too tight within normal volatility range.
Quick Reference Table
| Feature | Shooting Star |
|---|---|
| Trend Context | Uptrend / Bull move |
| Candle Shape | Small body near low, long upper shadow |
| Indication | Potential bearish reversal |
| Confirmation | Next candle closes below low |
Final Thoughts
The Shooting Star candle is a simple yet powerful warning of buyer exhaustion. When combined with technical confluence and disciplined money management, it can greatly improve short-side timing and protect profits at the end of bullish moves.
