Shooting Star Candle Pattern
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Shooting Star Candlestick: Important Results
Theoretical performance: Bearish reversal Tested performance: Bearish reversal 59% of the time Frequency rank: 37 Overall performance rank: 55 Best percentage meeting price target: 84% (bear market, down breakout) Best average move in 10 days: 3.86% (bear market, up breakout) Best 10-day performance rank: 46 (bull market, up breakout) All ranks are out of 103 candlestick patterns with the top performer ranking 1. “Best” means the highest rated of the four combinations of bull/bear market, up/down breakouts. The above numbers are based on hundreds of perfect trades. See the glossary for definitions. |  Shooting Star |
The candle looks as if price has reversed direction. Examining the performance statistics confirms that the shooting star acts as a reversal 59% of the time. However, I still consider that “near random” performance. Thus, although price reverses more often than not, do not depend on that happening.
Shooting Star Candlestick: Discussion
Day traders that I know depend on the shooting star more often than I think they should, but my statistics are based on the daily charts, not intra day ones. I found that the shooting star candle acts as a bearish reversal 59% of the time. I consider that “near random” performance.
Shooting Star Candlestick: Three Trading Tidbits
- Shooting star candles that appear within a third of the yearly low perform best — page 663.
- For the best performance, select shooting star candles as part of an upward retracement in a downward price trend — page 664-665.
- Shooting stars within a third of the yearly low frequently act as reversals — page 665.
Shooting Star Candlestick: Example
Pictured in the daily chart at A is an example of a shooting star that appears as part of a retrace in a downward price trend. Unfortunately, the downward trend is not a long one, so this is not a perfect example.
Price moves down from the highest peak on the chart, bottoms, and then bounces. A shooting star with a tall upper shadow, no lower one, and a small body appears. The shooting star signals a change in momentum from up to down with the bulls forcing price to a peak but the bears battling back so that price closes near where it opens. The next day, and in the coming days, price moves lower.
This is an example of how a shooting star is supposed to work. With the close near the low, it should not take much for price to breakout downward (a close below the bottom of the candlestick) and yet it does so only 59% of the time.
