What is Shooting star?
Tushayotgan yulduz
In short
A small-bodied candle with a long upper wick. After a rally it signals selling pressure.
A shooting star is a candle with a small body, a long upper wick and a very short lower wick. It matters when it appears after a rally. What it says: during the period buyers pushed price higher, but sellers drove it back and forced a close near the open.
Typical criteria
- The upper wick is at least twice the length of the body.
- The body sits in the lower part of the range.
- The lower wick is tiny or absent.
It is the mirror image of the hammer, in the opposite context.
How it is used
A shooting star suggests the rally is losing steam and sellers are stepping in. It deserves attention especially at a resistance level or after an extended rally, on high volume. For a trader holding a long position, it is a reason to think about taking partial profit or tightening the stop. Confirmation is a following candle that closes below the star's low.
Limitations
In a strong trend such candles appear regularly and often lead nowhere. The same shape after a decline is called an inverted hammer and is read differently.
The body shows who won, the wicks show what was rejected. Marubozu: a full body with almost no wicks. Spinning top and doji: a small body, indecision. Hammer and dragonfly doji: lower prices were rejected. Shooting star and gravestone doji: higher prices were rejected.
Example
Illustrative case: a stock climbs from $80 to $95 over three weeks, with a prior high around $98. The next candle opens at $94.50, reaches a high of $98.50, closes at $94.00, with a low of $93.80.
- Body: $94.50 − $94.00 = $0.50 (red).
- Upper wick: $98.50 − $94.50 = $4.00 — eight times the body.
- Lower wick: $94.00 − $93.80 = $0.20.
Price poked above the old high to $98.50 but couldn't hold there. A close below $93.80 the next day would confirm. A trader who bought at $85 might raise the stop to, say, $92 to protect the remaining gain.
Mistakes and tips
Don't read every long upper wick in the middle of a rally as a reversal — you need context and confirmation.
Level + high volume + shooting star is far more reliable than the candle alone.
Shorting the moment the shape appears is risky: strong stocks can keep rising even after such a candle.
Frequently asked questions
- Should I sell a stock when a shooting star appears?
- Not automatically. It is a warning sign: many traders wait for confirmation or tighten their stop rather than closing the whole position.
- What is the difference between a shooting star and an inverted hammer?
- The shape is the same; only the context differs. After a rally it is a shooting star, after a decline it is an inverted hammer.
Learn it in the Academy
This term is covered with hands-on examples and a quiz in these lessons of the interactive course.
Try the theory without risk
Open a free account: demo trading with a $10,000 virtual balance, a trading journal, calculators and a step-by-step course.