Shooting Star Pattern - How to Identify & Trade

Shooting Star Pattern

A bearish reversal candle with a long upper shadow that warns an uptrend may be ending.

Bearish Reversal
Long upper shadow (2x+) Small body Little/no lower shadow Bearish Reversal SHOOTING STAR

How to Identify a Shooting Star

• Small body at the lower end: The real body is small and positioned in the bottom third of the candle's total range. The body color can be red or green, though a red body provides slightly stronger bearish confirmation.

• Long upper shadow at least 2x the body: The upper wick must be at least twice the height of the body. This shadow shows that buyers pushed price significantly higher during the session but were overwhelmed by sellers who drove it back down. The longer the upper shadow, the more bearish the signal.

• Little or no lower shadow: There should be minimal wick below the body. A significant lower shadow would weaken the pattern and might classify it as a different formation like a Spinning Top or High Wave candle.

• Appears at the top of an uptrend: The Shooting Star only qualifies as a bearish reversal signal when it forms after at least three to four consecutive rising candles. The same shape at the bottom of a downtrend is called an Inverted Hammer and is actually a bullish signal.

How to Trade the Shooting Star

Entry

Enter short below the Shooting Star's low on the next candle. Wait for the confirmation candle to close below the Shooting Star's body. A gap down on the next open provides strong additional confirmation.

Stop-Loss

Place your stop above the Shooting Star's high (the top of the upper shadow). This is the level where the highest buying pressure was rejected. Add a small buffer of 1-2% above the wick tip.

Target

Target the nearest support level below. The prior swing low before the uptrend started makes an excellent target. Use a minimum 1:2 risk-to-reward ratio for trade qualification.

Success Rate

59%
Historical success rate as a bearish reversal signal

The Shooting Star achieves roughly a 59% success rate when appearing at the top of a defined uptrend. Success increases significantly when the pattern forms at a known resistance level and is accompanied by above-average volume. The pattern is most reliable on daily charts and performs best when the upper shadow is at least three times the body length. Always wait for confirmation from the next candle before entering, as an unconfirmed Shooting Star can easily be absorbed by continued buying.

Frequently Asked Questions

A Shooting Star is a bearish reversal candlestick pattern that forms at the top of an uptrend. It has a small body near the bottom of the candle and a long upper shadow at least twice the body length. It signals that buyers pushed price to new highs during the session, but sellers overwhelmed them and drove price back down near the open, rejecting the higher prices.
A Shooting Star and an Inverted Hammer look identical but appear in opposite trend contexts. A Shooting Star forms at the top of an uptrend and is a bearish reversal signal. An Inverted Hammer forms at the bottom of a downtrend and is a bullish reversal signal. The candle shape is the same; only the trend location changes the meaning.
Both are bearish reversal patterns appearing at the top of uptrends, but they look completely different. A Shooting Star has a long upper shadow and a small body at the bottom. A Hanging Man has a long lower shadow and a small body at the top. The Shooting Star shows failed buying pressure above current levels, while the Hanging Man reveals selling pressure emerging from below.
Yes, confirmation is strongly recommended. Look for the next candle to close below the Shooting Star's body. Additional confirmation includes above-average volume on the Shooting Star, a gap down on the next session's open, and the pattern forming at a known resistance zone. Without confirmation, a Shooting Star can be a false signal within a continuing uptrend.
Yes. High volume on the Shooting Star candle means more participants attempted to push prices higher and were rejected. This widespread rejection of higher prices increases the likelihood of a real reversal. Low-volume Shooting Stars are less significant because they may simply reflect thin trading rather than genuine selling pressure, and are more likely to produce false signals.

Related Patterns

Doji

Neutral indecision candle where open equals close, signaling a potential reversal.

Engulfing Pattern

Two-candle reversal pattern where the second candle completely engulfs the first.

Morning Star

Three-candle bullish reversal with a gap down star and strong recovery candle.

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