Best revesal candle

sooting star

 In the illustration above you can see what the shooting star candlestick appears like. Notice the long upper wick within the shooting star formation.

This is often referred to as a shadow or a price rejection to the upside. Additionally, note how the open, and the close occur near the bottom third of the price range.

There are no exact rules as it relates to the labeling of a shooting star pattern, however, as a general guideline, we want to see a long upper wick, a relatively small body, and a short lower wick. 

If we take a moment to understand the dynamics behind the shooting star candle, it will strengthen our resolve when it comes to trading the pattern. So what is going on behind the scenes in a shooting star candle?

Let’s refer back to our illustration above for further clarification. Notice how the price opens near the lower one third of the range, and then the bulls push the prices higher, which is represented by the upper shadow of the shooting star pattern.

The bulls, however, could not maintain the price move higher, as sellers came in and overwhelm the buyers with their supply-side orders. This  leads to a sharp move lower as the sellers are the ones that are truly in control of the market during this time.

This is evident from the closing price within the shooting star, which occurs within the lower one third of the price range. So essentially, we consider a shooting star pattern to be an upside rejection pattern . The implica tion of which is that the supply in the market is higher than the demand, thus, a continued price decline should ensue.

 It’s important to note that the most reliable shooting star patterns are the ones that occur on the higher timeframe price charts. We want to focus on timeframe such as the four hour, eight hour, daily, weekly and monthly when scanning for shooting star formations. The daily timeframe chart offers the best combination of reliability and frequency as it relates to the shooting star candlestick formation