what does the shooting star tell you 
shooting stars indicate a potential price top and reversal the shooting star candle is most effective when it forms after a series of three or more consecutive rising candles with higher highs it may also occur during a period of overall rising prices even if a few recent candles were bearish following the advance a shooting star opens and then rises strongly during the day this shows the same buying pressure seen over the last several periods 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 this shows that buyers lost control by the close of the day and the sellers may be taking over the long upper shadow represents the buyers who bought during the day but are now in a losing position because the price dropped back to the open the candle that forms after the shooting star is what confirms the shooting star candle the next candle s high must stay below the high of the shooting star and then proceed to close below the close of the shooting star ideally the candle after the shooting star gaps lower or opens near the prior close and then moves lower on heavy volume a down day after a shooting star helps confirm the price reversal and indicates the price could continue to fall traders may look to sell or short sell if the price rises after a shooting star the price range of the shooting star may still act as resistance for example the price may consolidate in the area of the shooting star if the price ultimately continues to rise the uptrend is still intact and traders should favor long positions over selling or shorting example of how to use the shooting starin this example the stock is rising in an overall uptrend the uptrend accelerates just prior to the formation of a shooting star the shooting star shows the price opened and went higher upper shadow then closed near the open the following day closed lower helping to confirm a potential price move lower the high of the shooting star was not exceeded and the price moved within a downtrend for the next month if trading this pattern the trader could sell any long positions they were in once the confirmation candle was in place the difference between the shooting star and the inverted hammerthe inverted hammer and the shooting star look exactly the same they both have long upper shadows and small real bodies near the low of the candle with little or no lower shadow the difference is context a shooting star occurs after a price advance and marks a potential turning point lower an inverted hammer occurs after a price decline and marks a potential turning point higher limitations of the shooting starone candle isn t all that significant in a major uptrend prices are always gyrating so the sellers taking control for part of one period like in a shooting star may not end up being significant at all this is why confirmation is required selling must occur after the shooting star although even with confirmation there is no guarantee the price will continue to fall or how far after a brief decline the price could keep advancing in alignment with the longer term uptrend utilize stop losses when using candlesticks so when they don t work out your risk is controlled also consider using candlesticks in conjunction with other forms of analysis a candlestick pattern may take on more significance if it occurs near a level that has been deemed important by other forms of technical analysis 