Trade Share CFDs for your favourite companies and 50+ U.S. stocks. Click here.
Refer a friend
Title Icon


Have a basic understanding of Forex, but not sure how to
level up? We have got you covered.

Understanding The Shooting Star Candlestick Pattern

The Shooting Star Candlestick Pattern can identify bearish market reversals and provide traders with ideal price levels to short or exit the trade. The pattern is easily identifiable as traders can spot it with an extremely long upper wick, which also signals the market reversal point. In our article, we will learn in-depth about the Shooting Star Candlestick Pattern and how to trade it.

What is a Shooting Star Candlestick Pattern?

A Shooting Star is a candlestick pattern formed when currency pair prices open, increase immediately, and then close near the opening price, indicating a downtrend reversal. The candlestick Shooting Star is formed after three or more green (bullish) candlesticks appear simultaneously, marking higher prices of the currency pair. The green candlesticks are followed by a small-bodied red (bearish) candlestick with an extremely long upper wick and no lower wick at all, indicating that the overall rising uptrend is now going to reverse into a downtrend. The long wick also indicates a strong buying pressure during the last few days, but the price is brought near to the close price as the day ends and selling pressure increases.


Is a Shooting Star Candle bullish?

The Shooting Star Candlestick is a bearish candlestick on its own. The bullish version of the Shooting Star Pattern is called the Inverted Hammer that is formed after a currency pair’s prices stop falling, reverse and start rising instead. The Inverted Hammer Candlestick pattern is formed after a few red (bearish) candlestick patterns appear in the market. It is formed as a small-bodied green (bullish) candlestick with an extremely long upper wick and no lower wick. The long upper wick indicates a significant currency pair price top and the absence of a lower wick indicates that the currency pair prices did not fall below their opening prices. When this candlestick is followed by other green candlesticks that open at a higher price level and make higher highs in the market, the Inverted Hammer Candlestick pattern is confirmed and the market is said to be in an uptrend. This pattern signals traders to long or enter their trades in the market.


Example of the Shooting Star Pattern

Let us assume that you want to trade USD/EUR, which is currently in an uptrend, making higher highs in the market. The currency pair is trending at 2.5, with the current price top at 4. As you are monitoring the market, the currency pair makes a new price high at 5.5 right before the market closes at 4.2, higher than the previous day’s close. You decide to enter your first trade at this point and place a long order. The next day, the market opens at 4.3, which is again higher than the previous day’s close and trades between 4.3 and 4.6 the entire day, making a brand new high of 6 and no lows. You decide to exit your first order at 5.5, which was also the previous day’s high and wait until the market forms a new trend. At this point, the selling pressures on the market increase as more and more traders like you exit the trade to benefit from the price increase. The selling pressures lead to a reversal in the market, which is confirmed after another bearish or red candlestick is formed the next day. The current candlestick opens at a brand new low of 1.5, confirming the downtrend reversal. At this point, you decide to short the trade and enter the market at 1.5. Soon after, the market falls even lower, touching price points of 1, 0.75, 0.60, 0.50 and so on. This signals you to short the trade and hold them until the market rises again.

How to use the Shooting Star Candlestick

  1. Identify a currency pair currently in an uptrend. Determine the reversal point where the currency pair marks a new high but trades and closes near its closing price.
  2. Short the trade at the price the candlestick opens lower than the previous day’s close price.
  3. Place a stop-loss order at the latest swing high to maximise returns.
  4. Place your take profit orders at twice the distance of where you have placed the stop-loss order to minimise risk.
  5. After you enter the short position, wait for the markets to fall further and buy back more units of the currency pair at a lower price.
  6. Hold your position and monitor the market until you receive a confirmed signal of the market reversing in the upward direction once again.

Start trading the Shooting Star Candlestick today and short the trades

The Shooting Star Candlestick Pattern can be used to identify the ideal price levels at which you can short the currency pair and benefit even from the falling markets. Start forex trading in Australia today with Blueberry Markets to get hold of popular currency pairs, robust technical tools and a seamless trade execution system. Sign up for a live trading account or try a risk-free demo account.

Recommended Topics

  • How to Read Trading Charts

    Trading forex live charts can help identify ongoing market trends, which can help you place successful traders.

  • Top Reversal Patterns For Forex Trading

    Reversal patterns provide traders with price levels at which the market can potentially reverse.

  • How to Find The Best Forex Trading Signals

    Forex trading signals are important market triggers that provide traders with ideal entry and exit price levels in the market.

  • Top Forex Trading Strategies That Actually Work

    Trading in forex, you will come across several forex trading strategies -- some more complex than the others. It is immensely crucial to start forex trading with the right strategy.

  • Scalping vs Swing Trading: What’s the Difference?

    Every forex trader has a different purpose, objective, time constraints, and investment capital. The right forex trading style for you depends on your main trading goals and requirements.

  • What are Volume Indicators

    Volume in the forex market can be used to determine the upcoming market trends. Volume indicators are forex trading indicators that can identify if the volume for a particular currency pair is high or low, providing traders with market continuation and reversal signals

  • Top Trading Chart Patterns

    Predicting future currency pair prices help in confirming market continuation and reversal signals.

  • What is Slippage in Forex Trading?

    Slippages occur when a currency pair order is executed at a price different from the set market order price.

  • Buy limit vs Sell Stop Orders in Forex

    Placing buy limit and sell stop orders help employ a price control strategy on forex trades. Let's take a look at buy limit vs sell stop orders.

  • The Best Time Frame For Forex Trading

    A time frame is a designated time period where forex trading takes place. Time frames can be measured in minutes, hours, days, weeks, months and years.

  • Top Technical Indicators in Forex

    Technical indicators are a market direction signal based on the current and historical price movement of a currency pair that provides traders with future price expectations

  • Top Continuation Patterns

    A continuation pattern indicates if the current market trend is going to continue in the same direction or not

  • How to Ace Divergence Trading in Forex

    The forex market is all about timing your trades well. Divergences give traders a market reversal signal right before a price trend changes

  • How To Trade Forex With Japanese Candlesticks?

    A Japanese Candlestick is a technical analysis tool used to analyze the currency pair’s price movement in the forex market.

  • Top Momentum Indicators To Analyse Trend Strength

    Momentum indicators are technical analysis tools that determine in which direction the market is headed and how strong or weak the ongoing trend is

  • Types of Moving Averages Every Trader Should Know

    Moving Average is a technical indicator which averages out currency pair prices in a specific time period in order to accurately identify market trend reversals and support-resistance levels.

  • 8 Popular Intraday Trading Indicators

    Intraday Trading Indicators help place successful short-term trade orders in the forex market.

  • What is the Tweezer Candlestick Formation?

    The Tweezer Candlestick formation is a reversal pattern that indicates either a market top (strong uptrend) or market bottom (strong downtrend)

  • Average Directional Index

    The ADX is a strength indicator that measures how strong or weak a particular market trend is.

  • How to Use Elliott Wave Theory For Forex Trading?

    The Elliott Wave Theory analyses a currency pair’s long-term price movement in the forex market.

  • What are Pivot Points in Forex

    Pivot Points help traders identify market reversals. With Pivot Points, traders can predict the support and resistance levels of a currency pair to make entry and exit decisions.

  • Keltner Channel

    Keltner Channel is a technical indicator that provides traders with strong continuation signals and trend directions by assessing a currency pair's price volatility.

  • Leading vs Lagging Indicators

    Leading and lagging indicators help traders measure the future and current performance of a currency pair, respectively. These indicators can help make successful trading decisions.

  • What is Relative Strength Index?

    Relative Strength Index (RSI) helps traders understand how frequently the currency pair prices change in the forex market to predict the future market prices.

  • Wide Ranging Bars

    Wide Ranging Bars are strong momentum indicators that help traders understand the market direction and identify ideal entry and exit points.

  • Harmonic Price Patterns in Forex

    Harmonic Price Patterns allow traders to predict future price movements and trend reversals to make ideal entry and exit decisions in the Forex market.

  • Double tops and bottoms

    Double Tops and Double Bottoms chart patterns help traders identify solid bullish and bearish trend reversals in the Forex market, and in turn, find the ideal market entry and exit points.

  • Falling and Rising Wedges

    When you are trading currency pairs in the Forex market, it is essential to know when the market can possibly reverse. The Falling and Rising Wedges pattern help identify market reversal signals and accurate market entry and exit points.

  • Forex Scalping Strategy

    Scalping refers to trading currency pairs in the Forex market based on real-time analysis. With Forex scalping, you hold a position for a very short period and close once you see a profit opportunity.

  • Symmetrical Triangle Pattern

    Symmetrical Triangle Patterns help identify market breakdowns (price fall) and breakouts (price rise), and in turn, help you plot the entry and exit prices for profitable Forex trading.

  • Introduction to Technical Analysis in Forex

    Technical analysis in Forex trading provides you with significant market trends, reversals and fluctuations and in turn helps you long and short term trades.

  • Trading breakouts and fakeouts

    Breakout and fakeout trading enable traders to take positions in rising and falling markets.

  • Fundamental Analysis in Forex Trading Explained

    Fundamental analysis in Forex trading is one of the several methods you can use to determine the relative security and intrinsic value of a nation’s currency.

  • 8 Top Commodity Trading Strategies

    Commodity trading is one of the best ways to diversify your portfolio and protect yourself from losses incurred due to inflation.

  • What is a Doji Candlestick?

    The Doji Candlestick is a pattern used in technical analyses of trend reversals in a market.

  • Moving Average: The Complete Guide

    Moving Average is used in Forex trading to compare the current currency pair pricing and where it stands with respect to the current average pair prices.

  • What is Volatility Index (VIX) and How Do You Trade It?

    One of the most popular trading markets in the world, the foreign exchange market allows investors to make quick money by trading currencies.

  • Forex Profit Calculator

    On average, a Forex trader can make anywhere between 5 to 15% of the initial amount they invested in the market.

  • Understanding markets gaps and slippage

    The foreign exchange rate reveals valuable details about particular currencies a trader wishes to trade-in.

  • What is a pip in forex?

    When trading in the Forex market, you need to have a close eye on two currencies at the same time. PIP helps you denote the change in a currency pair’s value.

  • Introduction to order types

    Order types in Forex trading determine and control how you enter and exit the market.

  • Using orders to manage risk

    Forex risk management includes a robust set of rules and regulations that protect you against Forex's negative impacts.

  • Managing risk in 7 steps

    Risk management in Forex is essential to individuals, groups of individuals, and organizations since it enables them to implement measures that help mitigate Forex risk and its negative impact.

  • Bullish and Bearish Flag Patterns

    Blueberry Markets discusses why it is essential to study the bullish and bearish flag patterns in Forex. Learn more.

Learn Icon


Master risk management and
become an expert forex trader.
Move on to the advanced course.

Guide to Forex
Trading indicators.

Enter your details to get a copy of our
free eBook

Thank you, please check your inbox for your ebook.

Ads BG

Start a risk free
demo account

News & Analysis

Catch up on what you might
have missed in the market.

Runner graphic

Ready to trade at
Blueberry Markets?

Your best trading experience
is a click away