What Is the Shooting Star Candlestick Pattern?

Download Article

A beginner’s guide on spotting a major bearish signal

Co-authored by Eric McClure

Last Updated: July 15, 2026 Fact Checked

Download Article

Shooting Star Candlestick Shape

|

Meaning

|

Shooting Stars vs. Inverted Hammers

|

How to Trade Shooting Stars

|

Video

If you’re learning how to read candlesticks because you’re interested in trading financial markets, you’re likely going to stumble across a good number of bearish reversal signals that you need to look out for. The shooting star is one of these signals. In this article, we’ll break down why the shooting star is a big deal (and what to do when you spot one).

The Shooting Star: Key Takeaways

Download Image

A diagram demonstrating where the shooting star appears in a candlestick chart and what the candle looks like.

Shooting stars are small candles with large wicks coming out of the top of the body.
Shooting stars must appear at the top of a prolonged uptrend. If they’re at the bottom of a downtrend, they’re known as inverted hammers.
Shooting stars are a bearish reversal signal that indicate the price action may be turning over.
Do not rely exclusively on reading candlesticks to enter or exit trades.

Section 1 of 4:

What is a shooting star candlestick pattern?

Download Article

The shooting star is a small candle at the top of an uptrend. If you’re reading candlesticks, shooting stars must occur at the apex of an upward trend where prices have been steadily climbing for a while. They can also appear at the end of breakouts from horizontal channels, but only if the breakout is prolonged and meaningful. The candle itself must have a very small body with a very long wick sticking out the top of itself. There should be no wick sticking out the bottom.^{[1]
X
Research source}
- Shooting stars can be red or green, but they’re more “potent” if they’re red. Shooting stars do not need to be one color or another to qualify as shooting stars—the location and shape of the candle is much more important. That said, it is considered a stronger signal if the candle is red.

Section 2 of 4:

What does a shooting star pattern mean?

Download Article

The shooting star is a bearish reversal signal. The shooting star is a sign that the upward buying pressure may be petering out. Think about what happens here for the candle to form: the security opens above the close of the last trading period. Then, traders fight to push the stock up, but they can’t do it (ergo, the long wick on top). The price settles back down near the open. This means the bulls are losing considerable steam and the stock could turn over.^{[2]
X
Research source}
- Note the volume on the shooting star candle. Sometimes, on stocks with low liquidity, the shooting star isn’t that meaningful of a signal. But if the volume on that candle is higher than every previous candle, it’s a major sign a reversal may be on the horizon.
- Why would the price fall after going up so much? Barring any fundamental changes or news catalysts, this is a classic signal to take profits. After a long period of the position going up, people who are holding the position will be inclined to sell some (or all) of their stake while the position is still high.

Section 3 of 4:

Shooting Stars vs. Inverted Hammers

Download Article

Inverted hammers appear in a different location. The inverted hammer candlestick looks literally identical to the shooting star: it’s a small body with a large wick sticking out of the top. The difference is where the candle appears. While shooting stars appear at the top of uptrends, inverted hammers can only appear at the bottom of downtrends.^{[3]
X
Research source}
- Inverted hammers are a bullish reversal pattern. Shooting stars signal that the price is likely to drop, while inverted hammers indicate that the price is likely to rise. The candles may be the exact same, but like real estate, it’s all about location, location, location!

Section 4 of 4:

Tips on Trading Shooting Star Patterns

Download Article

1
Wait for confirmation if you’re not feeling ambitious. Shooting stars are not extremely consistent signals, especially if the price is rising due to fundamental or macroeconomic factors. Before doing anything, consider throwing the security on a watchlist or checking back on it the next day. If you see a giant red candle forming alongside meaningful volume, the shooting star is confirmed.^{[4]
X
Research source}
- What is “confirmation?” In financial trading, “confirmation” refers to a second (or third) technical indicator that reaffirms an initial signal. With a shooting star, the initial signal is bearish. But you need 1-2 additional data points to confirm that! In this case, waiting a day and monitoring the volume can provide additional information.
2
Use shooting star patterns to initiate short positions. There is not a long buying opportunity with a shooting star (unless you think it’s a false signal), but if you’re not a long-only trader, the shooting star is a great short signal. You may still want to wait for confirmation, but now is an excellent time to short shares, buy puts, or sell calls.^{[5]
X
Research source}
- What is a short? In investing and trading, you normally buy something and sell it later. This is called being “long.” A short is where you sell something first, then buy it back later. Basically, it’s how you bet on a price falling.^{[6]
  X
  Trustworthy Source
  
  Investor.gov
  Website maintained by the Securities and Exchange Commision’s Office of Investor Education and Advocacy providing free resources about investing.
  
  Go to source} Here’s an example:
  - Say stock ABCD is trading at $100. You see a shooting star after a prolonged uptrend and assume people will start to take profits.
  - You short 10 shares of ABCD at $100. Your account is now negative (-10) shares, and you are actively short.
  - If the stock goes down to, say, $80, you can buy 10 shares to close your position. You walk away with zero shares and get to keep $20 per share, or $200. Remember, you sold at $100 and bought at $80!
3
Rely on previous support levels to close any short positions. In trading markets, support refers to the price levels where investors were previously very happy to begin buying shares. You can find support levels by looking at your chart and finding where the last major level was located, where there was tons of candlestick interaction.^{[7]
X
Research source}
4
Use a shooting star to take profits yourself if you’re long. You don’t have to use shooting stars to initiate positions—you can use them to close them, too. If you’re long a stock, currency, contract, or whatever and you spot a shooting star after a prolonged run, it could be your cue to consider taking some exposure off of the table.^{[8]
X
Research source}
- You don’t have to sell your whole position. A lot of traders will sell half, or a third, or some fixed amount of a winning trade and leave the rest on the table. That way, if the position keeps running, you’ll capture some of the profits, but if it goes down, at least you already secured some profits.
5
Do not rely solely on a shooting star signal to trade. Technical analysis is not a science, and the signals you find are not 100% consistent. Unexpected things happen in markets, and you cannot rely exclusively on candlesticks to forecast changes in prices. You’ll also want to use fundamental analysis, macroeconomic analysis, quantitative analysis, and your personal risk-reward limitations to determine what you buy or sell as a trader.^{[9]
X
Research source}
- The research surrounding TA indicates that it’s not a very consistent way to predict future price action, but it does indicate that traders who use TA in addition to other trading strategies and variables have a minor edge.^{[10]
  X
  Research source}