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What is "Shooting Star"?

The Shooting Star formation is a special form of the Evening Star pattern. This pattern rarely appears in a chart. When this pattern appears on top an uptrend it could indicate a bearish reversal or at least a short-term correction to an existing rally (see image).

The first candle of the pattern is always bullish. The second candle has a small real body and could be bearish or bullish. The second candle must look like an inverted Hanging Man. In other words the lower shadow of the second candle is either zero or very small in size. The third candle is always bearish. The body of the first and third candle is usually long. The most important characteristic of the shooting Star formation is that the real body of the second candle must lie above the real body of the first candle. In other words the real body of the second candle does not overlap the real body of the first candle. It could be above the upper shadow of the first candle or overlap with it.

There is another definition of the Shooting Start that focuses on the second candle only. In this definition Shooting Star is nothing but an inverted Hanging Man pattern. I prefer to take the other two candles into account.

This patter rarely appears in Forex charts. It is also rarely reliable. If you want to use this pattern make sure to consider other technical and/or fundamental tools to confirm it.

Locating "Shooting Star" Formation in a Chart

The main problem with locating Shooting Star is the subjective definition of the pattern (just like Morning and Evening Star patterns). I made some assumptions to help my custom indicator locate such patterns in a chart. The following image shows a sample pattern which is located by this indicator.

The indicator places three down arrows above the candles to locate the pattern.

Download the "ShootingStar" Indicator [download]

Click here to download the compiled version of this indicator. I have designed the indicator for MetaTrader 4 (MT4). If you are not using the latest build of MT4 then you may encounter technical problems. Click here for more information and possible solutions.

If you are not familiar with using custom indicators then click here.

If you are one of my MQL students you may download the source code of this indicator from your training site. Click here for more information about my MQL training program. You may also click here for more information about different options that I offer for training MQL (one of them is absolutely free).

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Previous Candlestick Lessons:

Lesson 01: An Introduction to Candlestick Charts

Lesson 02: Umbrella Lines - Reversal

Lesson 03: Doji Candles - Part 1

Lesson 04: Doji Candles - Part 2

Lesson 05: The Spinning Top Candle

Lesson 06: The Engulfing Pattern

Lesson 07: Dark-cloud Cover

Lesson 08: Bullish Piercing Formation

Lesson 09: Window - Falling and Rising

Lesson 10: Morning Star a Bullish Reversal Pattern

Lesson 11: Evening Star a Bearish Reversal Pattern