Shooting star candlestick forex

shooting star candlestick forex

Faster Than Everyone Else shooting star trading strategy This is the 2-minute chart of Hewlett-Packard from June 10, 2016. There are three basic tricks for trading the shooting star candlestick figure: Sell the security after the creation of a bullish trend, a shooting star candle, and a bearish confirmation candle. Feel free to leave any comments below, we do read them all and will respond. The candle falls into the hammer group and is a first cousin of the hanging man, hammer, and inverted hammer. Note: For more on how to pick significant support and resistance levels like the pros do, tabtrader buy bitcoin and ethereum on exchanges download my free eBook, How to Choose Better Support and Resistance Levels. As the day progresses, though, the sellers step in and push the price back down to near the open, erasing the gains for the day. You will also need a bearish candle to break the low point of the shooting star body. Of the two standard entries, I prefer this one because it creates a slightly better reward to risk scenario. 2) Stop Loss You should always use a stop loss order when trading the shooting star candle pattern.

A down day after a shooting star helps confirm the price reversal and indicates the price could continue to fall. It is important to mention that the shooting star candlestick pattern is even more reliable when it develops after three consecutive bullish candles. Note: If the shooting star itself confirms with a lower close (as mentioned in the previous section it will also meet this requirement, because a bearish real body shooting star will always close within the lower 1/3rd of its range. After we short Apple, the price enters a downtrend.

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If trading this pattern, the trader could sell any long positions they were in once the confirmation candle was in place. The odds of a bearish reversal happening at current prices are lower if lower prices have already been rejected by the market. In other words, there shouldnt be any other competing higher highs close by in recent history. In my bearish engulfing guide, I mentioned that the confirmation close is necessarily met by the formation of the bearish engulfing pattern itself. If you dont understand it yet, dont worry. In technical analysis, the shooting star pin bar is made up of a single candlestick. Visit m Author Details Al Hill Administrator Co-Founder Tradingsim Al Hill is one of the co-founders of Tradingsim. However, the proprietary filters that I personally use to qualify a good shooting star are quite different, so lets go over those now. If you dont thoroughly test new techniques, you wont have the confidence to stick with them when you experience losing streaks.