After a downward trend in the market, a hammer candlestick can be a good indicator to repurchase those securities and benefit from a potentially bullish market run. This is when the bearish market becomes your friend. This is where you can take a short position and sell your holdings now to repurchase them with more purchasing power when the market dips. When you observe a general upward trend in the market, a shooting star could appear somewhere around the peak, the next trading day's closing price would confirm your suspicions of an upcoming price fall. You may come across a range of candlesticks when trading, and knowing the types of candlesticks isn’t enough you have to know what to do with them.
SHOOTING STAR CHART PATTERN HOW TO
Considering all the other elements such as the long wick on top sized greater than twice the length of the candle body, and the little to no wick at the bottom, you can still recognise a shooting star candlestick and predict the possible downward notion of the market How to trade using a Shooting star candlestick? It is important to note that some shooting star candlesticks patterns may be deceiving and present themselves with the colour green suggesting the market opening price was lower than the closing price, these are bullish Shooting star candlesticks also known as inverted hammer candlesticks. The shooting star candlestick pattern usually occurs after an advance or upward trend in the market and signifies a potential fall in the market.
How to Identify Shooting Star candlestick pattern?Ī shooting star candlestick can be recognised as a small-bodied candlestick with a long wick on the top and little to no wick on the bottom.
The bears can overpower the bulls as they’re selling in greater quantities and hence the closing price of the security is lower than the opening. They soon meet with the bears who begin selling the securities when they’ve reached a particular peak price. The common reason for this particular shape of the shooting star candlestick is when the market opens, the bulls drive the market up through their purchasing power. Hence, the shooting star candlestick, usually represented by the colour red to signify its bearish nature, has a small body with an extended wick above the body and either a small or absolutely no wick stemming below the body of the candlestick. The lowest price for the day is either the closing price or lower. The Shooting Star Candlestick occurs when the opening price for a security is higher than the closing price and the positive fluctuation (the highest price for that day) is greater than twice the difference between the opening and closing figures. The stock market is either indecisive (Doji Candlestick), Bullish (Hammer Candlestick) or, as in this case, Bearish – The Shooting Star Candlestick. What is a Shooting Star Candlestick Pattern?Ĭandlesticks usually present data for adequate technical analysis and highlight a few things about the market for that particular day or time. What is Dematerialization & It's Process.Difference Between Demat and Trading Account.Documents Required to Open a Demat Account.Aims, Objectives and Importance of Demat Account.What is the Sub-broker Program of IIFL?.
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