Lesson 3 of 6 · 8 min
Shooting Star
Step 1
What it is
A shooting star is a hammer turned upside down: a small body near the bottom and a long wick above, after price has risen.
It shows that buyers pushed price up during that period and sellers pushed it back. Like every candle, it describes the past. It does not promise a fall.
Traders use it because it marks a clear rejection, with a clear place for a stop just above the wick.
Step 2
See it on a chart
A shooting star on a volume spike, followed by a candle that closes down.
Illustrative chart with made-up prices and tick volume, built for teaching. It is not real market data and not a trade idea.
Step 3
The exact rules
What must be true before entry
- A long upper wick at least twice the body, after a clear rise.
- Volume above the recent average on that candle.
- A next candle that closes down.
What volume should show
Where to enter
Where the hard stop goes
Where the target goes
What invalidates the idea
- Price trades past the tip of the wick.
- The next candle closes above the star.
When not to take it
- The trend is strong and there is no sign of a level.
- The wick is so long that 3:1 is not possible.
- Major news is due soon, or you would be trading outside your planned hours.
- You have just taken a loss and feel the need to win it back.
Step 4
Your turn: plan the trade
Practise the opposite side: price has fallen, and a hammer formed on heavy volume. The next candle closed up. Mark your plan.
This setup is a long. Look at the candles and the volume. Choose a line below, then tap the chart to place it. You can also drag its label or type a price.
Illustrative chart with made-up prices and tick volume, built for teaching. It is not real market data and not a trade idea.
Step 5
The trap: shorting because it feels too high
A market that has risen a long way can feel like it must fall. That feeling is not evidence. If your reason for a short is that the price looks silly, you do not yet have a setup.
Take the Personal Litmus TestStep 6