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What is shooting Star:
A shooting star is a bearish reversal chart pattern that is characterized by a long upper wick, little or nonexistent lower wick and a small body. In technical analysis, the shooting star pin bar is made up of a single candlestick.
The shooting star inverted hammer is only reliable when they occur at the end of uptrends.

Depending on your chart settings, the real body of the inverted hammer can be either green (bullish) or red (bearish). However, the bearish shooting star is more powerful because the closing price is lower than the opening price.
Another characteristic of the bearish shooting star is that the wicks need to be at least 2-3 times the size of the body.

Shooting Star Candle Strategy:

The shooting star candle strategy is a very simple but very effective methodology to trade the financial markets. You can trade stocks, Forex, currencies, commodities, futures and even cryptocurrencies across various time frames.But H4,D1 is best.
Shooting Star sell confirmation:
For this strategy we need one indicator along with shooting star canlde named Chaikin Money flow Indicator.
Step #1: Attach the Chaikin Money Flow Indicator on your Preferred Time Frame
Start first by preparing your charts ready for the battle. Simply attach the Chaikin Money Flow indicator on your favorite time frame. This is the only additional technical tool we’re going to use to confirm the validity of the bearish shooting star pattern.
Using the CMF indicator, we accomplish one major thing.
The validity of the bearish shooting star will be confirmed or invalidate instantly as soon as the bearish inverted hammer develops on our Bitcoin candlestick chart. This means that the price won’t move any further from the ideal entry price.

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Step #2: The Shooting Star Candle should come after a strong bullish trend
The location, or where the shooting star candlestick develops, matters a lot.
This whole ingredient is what makes the bearish shooting star candle performs with such a high degree of accuracy. We need a strong uptrend that has two important features:

  • The first part of the trend is a slow and steady move to the upside
  • The last part of the uptrend, prior to the shooting star candle, needs to be more volatile.

Basically, we’re looking for a full-blown market top where the bulls are exhausted and reach a climax point.

Step #3: The CMF indicator must be below the 0 lines once the bearish shooting star candle develops
Chaikin Money Flow is a great tool to read and measure institutional accumulation-distribution activity in any market. Basically, a CMF reading below the zero line shows that the sellers have the upper hand and they took control of the market.

Notice that the bearish shooting star spotted satisfies all the requirements of a bearish inverted hammer. The shadows are at least two times longer than the body, small body, and very little lower shadow. This candle would have been more powerful if the closing price is below the opening price.
But it’s still a good pattern to trade due to all the other features.
Now, it’s time to highlight how to find the right entry point for bearish shooting star candlestick.
See below:
Step #4: Sell once we break the low of the Shooting Star Candle
Simply place a limit sell order below the low of the shooting star. Nothing complicated about our entry strategy. It’s in line with the textbook rule.

What is the ideal place to hide your protective stop loss? Where should you exit a profitable trade when trading shooting star candle?
See below:
Step #5: Hide SL above the high of the Shooting Star Candle. TP when we get inside the slow part of the prevailing trend.
Simply hide your protective SL above the high of the shooting star pattern. You can add a buffer of a few pips if you wish to protect against possible false breakouts.
The full-blown top creates the necessary space where the bears would find no level of support to stop the drop. The last stage of a trend has been always more volatile. When combined with the reversal shooting star pattern, it makes for a killer trading strategy.

In this regard when the price reaches the portion where the prevailing uptrend was moving slow, we take profits. That’s where the price will find some hostility to advance further on the downside. We want to clear out our position when that happens.

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