Also known as: Shooting star candle · Bearish pin bar
A shooting star is a single-candle bearish reversal pattern that appears after an advance. It has a small body near the bottom of its range and a long upper wick at least twice the size of the body, with little or no lower wick. It shows that buyers tried to extend the rally, but sellers rejected the higher prices and pushed the close back down near the open.
What it looks like
After a series of rising candles, a new session opens near the prior close and spikes higher, sometimes to a new high for the move. Then the spike fades and price closes near where it started. On the chart, it looks like a star falling from the sky with a long tail above it.
The shooting star is the bearish mirror of the hammer. The same shape at the bottom of a downtrend is called an inverted hammer, with a different meaning entirely. Context is everything.
How to identify it
- A prior uptrend or a rally into resistance. Without an advance to reverse, there is no shooting star.
- A small real body in the lower third of the range. Color is secondary, though a red body is slightly stronger.
- A long upper wick at least twice the body’s length.
- Little or no lower wick.
- A meaningful high. The best examples reject a resistance level, a prior swing high or a round number.
- Confirmation. The next candle closes below the shooting star’s body, ideally below its low.
How to trade it
- Entry: on the close of the bearish confirmation candle, or on a break below the shooting star’s low.
- Stop: just above the tip of the upper wick.
- Target: the nearest support, such as the last swing low of the rally or a moving average, or a set multiple of the risk.
Worked example. An index CFD rallies from 4,120 to 4,315. A shooting star forms with a high of 4,372 and a close of 4,309. The next candle closes at 4,282, below the star’s low, and you go short there. The stop sits at 4,380, just above the wick, for a risk of 98 points. The last swing low inside the rally is at 4,140, offering a potential 142 points, a ratio of roughly 1 : 1.45. If you want a 1 : 2 setup, you would need either a tighter entry on a retest of the star’s body or a deeper target. The risk/reward calculator helps compare those options, and the Fibonacci calculator shows where the 38.2% and 61.8% retracements of the rally sit as intermediate targets.
Confirmation: volume, RSI, sentiment
- Volume: a shooting star on heavy volume shows that a large number of buyers were trapped at the highs. Rising volume on the confirmation candle adds weight.
- RSI: a shooting star formed while the RSI is overbought, or showing bearish divergence against a new price high, is more credible.
- Location: the signal is stronger at a known resistance, a prior high or the upper boundary of a pattern like a double top.
- Sentiment: shooting stars often print on days of euphoric headlines. When the crowd is loudly bullish and price still cannot hold its highs, the rejection deserves attention.
Common mistakes
- Shorting every long upper wick. In a strong uptrend, many such candles are just pauses before the next leg higher.
- Skipping confirmation. If the next candle closes above the shooting star’s high, the signal has failed.
- Confusing it with an inverted hammer. Same shape, opposite context.
- Stops too tight. A stop below the tip of the wick is often clipped by a retest of the high.
- Ignoring the higher timeframe. A five-minute shooting star inside a powerful daily uptrend is weak evidence.
Reliability caveat
The shooting star is a widely watched warning sign, but it is a single candle, and single candles are easily overridden by the prevailing trend. Its value grows with location at resistance, overbought momentum, strong volume and a clear bearish follow-through. Even then, it suggests a probable pause or reversal rather than a certainty, so define your invalidation before entering.
Spot it automatically with SnapPulse
Upload a screenshot or photo of a chart and SnapPulse flags the pattern with a directional bias and confidence percentage, draws the key levels on the candles, and proposes an entry zone, invalidation, target and risk/reward ratio in about five seconds. The Steelman card presents the bullish counter-argument and three triggers that would prove the bearish read wrong. Download SnapPulse to try it.
Educational content — not financial advice.
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