What does a shooting star look like?

Measure it like a hammer turned upside down, as the drawing at the top of this page shows.

Hypothetical: after a climb from $70 to $78, a daily candle opens at $78.40, rallies to $80.10 and closes at $78.10, with a low of $78.00. The body is $0.30, the upper wick runs from $78.40 to $80.10, $1.70 or almost six times the body, and the lower wick is $0.10. A gravestone doji is the same idea with no body at all; see the doji candlestick.

  • Upper wick: at least twice the body. The longer the wick, the more of the rally was rejected.
  • Body: small, near the low of the candle. A red body (close below the open) shows slightly more selling, but a green body with the right shape still counts.
  • Lower wick: none, or very short.
  • Prior move: a rise into the candle, ideally into resistance. Classic descriptions also want the star’s body to gap above the previous body; intraday that rarely happens, and most traders drop the rule.

Shooting star vs inverted hammer: same shape, different context

The inverted hammer has exactly the shooting star’s shape. After a rise into resistance, the candle is a shooting star: buyers failed at a price sellers defend. After a decline into support, it is an inverted hammer: buyers tried to push up and failed, but sellers could not extend the drop either, a weak bullish hint.

So read the trend before the candle, then the level, then the shape. The same logic separates the hammer from the hanging man, as explained in hammer candlestick. In both pairs the confirmation decides: a close below the body for the star, a close above the body, or above the high for stricter traders, for the inverted hammer.

Turn your phone sideways to read the drawing. Tap to close.

Two hand-drawn halves at the same scale. Left: rising candles into a red resistance line, a circled candle with a small body at the bottom and a long upper wick, labeled shooting star, after a rise, at resistance, followed by a lower close. Right: falling candles into a green support line, a circled candle with identical proportions, labeled inverted hammer, after a decline, at support, followed by a higher close. Arrows from a note reading same shape point to both.

How to trade a shooting star, even if you don’t sell short

The plan has four steps, in this order.

Hypothetical, using the candle above: a short taken at a following close of $77.40, with a stop at $80.30 just above the $80.10 high, risks $2.90 a share; support at $72.00 is $5.40 away, close to a 1:2 risk-reward ratio.

If you don’t sell short, the star is still useful: it is a reason to take partial profit on a long, raise the long’s stop under the confirming candle, or hold off buying a breakout. Short selling has its own costs and risks and is not available or permitted for every account; see short selling.

  1. Mark resistance first: a prior high, the top of a range, a level from your support and resistance work.
  2. Wait for the star to close. A long upper wick halfway through the period can still turn into a breakout candle by the close.
  3. Confirm: a following candle closes below the star’s body. Stricter traders want a close below its low.
  4. Stop just above the star’s high, where sellers are proven wrong. Target the next support, and only if it is clearly farther away than the stop.

Does volume matter for a shooting star?

Heavy volume on the star, compared with the candles before it, means many shares traded at the rejected prices: real supply met the push higher. A star on thin volume, in a quiet hour, is easier for buyers to overrun. Compare it with the usual volume for that time of day, which is what relative volume measures.

Watch the next candle’s volume too: a confirming red candle on rising volume is stronger than a drift lower on nothing. Volume adds weight to the confirmation; it never replaces it.

When does a shooting star fail?

The drawing below shows both endings with the same stop above the star’s high. On the left the next close is below the body and price falls; on the right the next candle closes above the high and the stop is hit.

The three-candle bearish version is the evening star, the mirror of the morning star. For reading wicks at levels without pattern names, see price action trading, and read stars on regular candles: Heikin Ashi candles average prices, so their wicks and bodies are not the real ones.

  • Strong uptrend: stars print on the way up and get overrun. A following close above the star’s high cancels it.
  • No level: a star in the middle of a move, far from resistance, rejects nothing in particular.
  • No confirmation: the next candle closes back inside or above the star’s body.
  • Wide stop: a very long wick puts the stop far from a sensible entry.
  • News and gaps: around earnings or big news, price can gap past the stop, so the loss can be larger than planned.

Turn your phone sideways to read the drawing. Tap to close.

Two hand-drawn halves with the same rise, the same circled shooting star and the same dashed stop line above its high. Left: the next candle closes below the star’s body under a sell triangle and price keeps falling, labeled next close below the body: confirmed. Right: the next candle closes above the star’s high and crosses the stop line, marked with a red X and labeled close above the high: stopped out.