What is a Shooting Star?

Another variation of a candlestick reversal pattern is the so called shooting star. It is characterized as a bearish signal.

The shooting star consists of a long upper wick and a small body. The upper wick should be at least twice as long as the shooting star's body height while the lower wick should be very small or nonexistent.

The color of the body is not important. The body of the shooting star appears near the end of the trading range and usually a gap is observed between it and the previous candlestick's body.

The shooting star formation shows a rallying market that has tried to reach new highs but has met pressure on the side of sellers. As a result the currency pair closes in proximity to the range bottom.

When a currency pair closes with a shooting star pattern, traders tend to sell it.

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