Discover the intricacies of the shooting star pattern, a key indicator of potential bearish reversals in the market. Learn how its structure, with a small body and long upper shadow, signals a shift in momentum and how to effectively trade this pattern for optimal results.
What Is a Shooting Star Candlestick Pattern in Trading?
The shooting star is a single-candle bearish reversal pattern that shows up after a clean push higher. It’s one of the classic Japanese candlestick signals (Munehisa Homma gets the credit), and traders use it to spot places where an uptrend is running out of fuel.
In plain terms, it’s a bearish shift in sentiment: price tries to break higher, gets rejected, and closes back down near the open. That rejection often lines up with resistance, prior highs, or “too expensive” zones where supply finally shows up.
Structurally, it’s easy to recognize. You get a small real body near the low of the candle, a long upper wick (at least 2x the body), and little to no lower wick.
The story is straightforward: buyers pushed price up early, then sellers stepped in hard and shoved it back down before the close. When that happens on strong volume, the message has more weight because it means real participation behind the rejection, not just a random spike. Many traders also use standard pattern rules to filter out weak lookalikes.
Shooting Star Pattern Checklist
Small real body near the low of the candle’s range
Upper wick at least 2x the body length
Little to no lower wick
Shows up after an uptrend, ideally into resistance / prior highs
Signals rejection of higher prices and sellers taking control
More reliable when volume expands on the rejection
How to Trade the Shooting Star Candlestick Pattern
Best Entry Triggers for a Shooting Star Short
If you want to short a shooting star, the clean approach is to wait for the next candle to prove it. A close below the shooting star’s body is the basic trigger. A break below the shooting star’s low is stronger, especially on markets that love stop runs like NASDAQ futures (NQ) or BTC.
Your best signals usually come when the candle prints into resistance, a prior swing high, or a Fibonacci retracement zone like 61.8%, ideally with other confluence (trendline touch, VWAP band, supply zone).
Where to Put Stop Loss and How to Size Positions
Stops are simple: put the stop loss above the shooting star high. If price takes that high back, the rejection failed and you don’t want to argue with it.
Keep sizing tight—most traders stick to 1–2% account risk per trade. Targets are usually the next obvious support area, a measured move, or you trail behind lower highs if the selloff turns into a real trend. Aim for at least 1:2 R:R unless the structure says otherwise.
Best Confirmation Signals: RSI, MACD, Volume, and Key Levels
The pattern gets a lot more tradable when it lines up with other signals. RSI above 70 can help flag stretched conditions. MACD divergence or a bearish crossover adds momentum confirmation.
Moving averages can help with context—if price is extended above the 20/50 and starts rolling over, the shooting star matters more. Pairing volume, support/resistance, and Fibonacci levels is usually enough to filter the worst setups. A trading journal helps you see which confirmations actually pay on your market (EUR/USD trades differently than TSLA, and both trade differently than SOL).
Step-by-Step Shooting Star Trading Plan
Spot a shooting star into resistance, a prior high, or a 61.8% retracement / confluence zone
Check if RSI is stretched (often >70) and price looks extended
Wait for a confirmation candle that closes below the shooting star’s body
Look for MACD divergence or a bearish crossover to back the shift
Make sure structure supports it (lower high forming, loss of momentum, reclaim failure)
Enter on a break/close below the shooting star’s low if you want the stronger trigger
Stop goes above the shooting star’s high
Target the next support or trail the move, aiming for at least 1:2 R:R
How Reliable Is the Shooting Star as a Bearish Reversal Signal?
The shooting star works best after a sustained run—think multiple higher highs or at least a few strong green sessions. It’s basically a snapshot of buyer exhaustion: bulls push, can’t hold it, and bears force price back down. It hits hardest at key resistance, prior swing highs, round numbers (like 100, 200, 1.3000), or any area where the chart already told you sellers might defend.
Still, you don’t want to treat it like an automatic short. The candle is the alert; confirmation is what turns it into a trade. The common confirmation is the next candle closing below the shooting star’s body, and the stronger version is a break and close below the shooting star’s low. If that follow-through comes with heavier sell volume, the reversal read is usually cleaner and you avoid a lot of whipsaws.
"The shooting star pattern alone is not enough - confirmation through the next candle's bearish close is essential to reduce false signals and validate the reversal."
When the Shooting Star Pattern Fails (Limitations)
Shooting stars fail a lot in chop. In a sideways range, you’ll see plenty of long-wick candles that don’t mean anything because there’s no trend to reverse. Low volume is another red flag—without participation, the candle can just be a random probe higher. The biggest mistake is shorting the candle itself with no confirmation, then watching the uptrend keep grinding higher.
High volatility makes it worse. On something like meme stocks, crude oil (CL), or small-cap crypto, you can get “shooting star” shapes all day from noise and liquidation wicks. That’s why context matters: trend strength, nearby resistance, and follow-through.
Use other tools—moving averages, key levels, RSI/MACD, and multi-timeframe alignment—to separate real reversals from fake-outs. None of this is 100%, so your edge comes from risk control more than being right every time.
Shooting Star Trading Mistakes to Avoid
Ignoring volume - Low participation often means a weak signal
Shorting without confirmation - Many shooting stars are just a pause before continuation
Forgetting the market regime - In ranges, long wicks are common and unreliable
Only using one timeframe - A daily shooting star means less if the weekly is still breaking out
No confluence - Levels, momentum, and structure should back the idea
Trading it in extreme volatility - Wick-heavy markets produce tons of false lookalikes
Loose risk management - Bad sizing and no hard stop will wipe out the edge fast
Shooting Star Anatomy: Body, Wick, Color, and Volume
A proper shooting star is basically two things: a small body and a dominant upper shadow. That upper wick should clearly stand out—at least twice the body—otherwise you’re usually looking at noise. The typical price path is: open near the low, rip higher, then fade hard and close back near the open. That’s the failed breakout attempt in one candle.
The body color matters, too. A red shooting star (close below open) is usually the cleaner read because it shows sellers didn’t just reject the highs—they actually won the session. A green shooting star can still work, but it’s more “warning shot” than confirmation.
Volume is the pattern’s lie detector. If you get elevated trading volume during the push-and-reject, it suggests institutions and fast money were active at those higher prices. On the flip side, a skinny-volume shooting star often fails because there wasn’t enough real selling behind it.
If volume dries up as price tries to hold the highs, that’s also useful—buyers aren’t willing to pay up, which keeps the reversal case alive.
Shooting Star vs Hammer vs Gravestone Doji vs Evening Star
Pattern Name | Structure | Context | Signal Strength |
|---|---|---|---|
Shooting Star | Small body at bottom, long upper wick, minimal lower shadow | After uptrend at resistance | Bearish reversal; needs confirmation |
Hammer | Small body at top, long lower wick, minimal upper shadow | After downtrend at support | Bullish reversal; opposite context |
Gravestone Doji | No body (open equals close), long upper wick | After uptrend at resistance | Often stronger; still best with follow-through |
Evening Star | Three-candle pattern with small-bodied star in middle | After uptrend at resistance | Robust reversal; confirmation is built in |
Hanging Man Pattern | Small body at top, long lower wick | After uptrend | Bearish warning; needs confirmation |
The shooting star and hammer are mirror images, but the trend context flips the meaning. Shooting star up top = rejected highs. Hammer down low = rejected lows. Same “fight” between buyers and sellers, just happening at different ends of the move.
The gravestone doji vs shooting star difference is the body. Gravestone doji closes exactly where it opened, so it screams “we tried higher and got slammed.” In real trading, though, both are best treated as reversal candidates until price actually follows through. The evening star is slower but cleaner because it bakes confirmation into the three-candle sequence.
Does the Shooting Star Work in Stocks, Forex, and Crypto?
The shooting star shows up everywhere, but it behaves a bit differently depending on the product. In stocks, it often prints after an earnings pop or into a big round number where funds take profit. In FX, it can mark turning points at major resistance, especially around CPI, NFP, or central bank decisions—forex traders use it to frame reversals at key zones. In crypto, you’ll see the pattern constantly, so you usually need stronger confirmation (structure break, volume shift, reclaim failure) before treating it as a top.
Timeframe matters. Daily and weekly shooting stars carry more signal than a random 15-minute wick. Backtest it on the specific ticker you trade—AAPL, EUR/JPY, and ETH all have different personalities.
Pair the candle with broader price action, moving averages, and level-to-level planning, then review historical examples—chart study is what teaches you which ones actually work.
Key Takeaways: Using the Shooting Star Pattern for Better Trades
The shooting star is a solid bearish reversal clue, especially when it prints into resistance after a strong run. Treat it like a warning that buyers just got stuffed at higher prices.
What makes it tradable is the follow-through: confirmation candle, a break of the low, and ideally confluence with momentum/structure (RSI stretch, MACD divergence, failed breakout). Then keep it simple—stop above the high, size properly, and target the next support. That’s how you turn a pretty candle into a repeatable setup.
How do you turn shooting star setups into repeatable, measurable trades over time?
The shooting star is only as useful as your ability to apply it consistently across markets, timeframes, and volatility regimes. Since the article emphasizes context (trend strength, resistance, volume) and confirmation (close below the body or a break of the low), the next step is tracking which combinations actually perform in your own trading. Logging each setup—entry trigger used, stop placement above the high, confluence factors like RSI/MACD, and the resulting R-multiple or PnL—helps you separate clean reversals from the “long-wick noise” that shows up in ranges and high volatility. Over a meaningful sample size, reviewing statistics like win rate by confirmation type, average excursion, and performance by timeframe can tighten decision-making and refine risk control. A structured dashboard such as Rizetrade trading journal analytics for tracking setups, PnL, and confirmation metrics can make that review process more objective, so the pattern becomes a tested playbook rather than a one-off signal.