Shooting star
A long wick up at the top: price was yanked higher and immediately returned. No buyers left up there.
Shooting star — what it is?
A shooting star is a small body at the bottom and a long upper wick, appearing at the top of a move. The shape matches the inverted hammer, the meaning is the opposite.
Inside the period price was lifted high but returned almost to the open by the close. The attempt to keep rising didn't hold.
It's especially telling when the upper wick went beyond the previous high and came back: that's a liquidity grab and a rejection of the level at once.
Shooting star — how it is built?
The upper wick noticeably longer than the body, the lower one almost absent, the candle standing at the top. The signal is stronger if the wick took equal highs or made a new high.
Shooting star — common mistakes
Selling off a star with no confirmation from structure.
Confusing it with an inverted hammer without looking at the location.
Ignoring the higher timeframe: against it, a star more often plays out as a pullback.
Placing your stop right behind the wick — there are still orders left there.
Related to
Glossary
- candle body
- the rectangle between the open and the close.
- long
- buying in expectation of a rise.
- wick
- the thin lines above and below the body that show the high and the low of the period.
- Inverted hammer
- a small body at the bottom, a long upper wick.
- high
- the highest price of the period.
- open
- the first price of the period.