What Is a Shooting Star Candle in Forex? Rules, Example and Common Mistakes

Short answer: A shooting star is a candle with a small body near the low and a long upper wick, at least about twice the body, that forms after a rise. It shows buyers pushed price up but sellers pushed it back before the close. It is a possible bearish reversal clue, not a guarantee, and it carries the most weight at a resistance level.

Anatomy of a shooting star. Illustration, November 2026.

What a shooting star looks like

A candle has a body (open to close) and wicks (the high and low reached). A shooting star has three features:

• A small body in the lower part of the candle’s range.
• An upper wick about two or more times the size of the body.
• Little or no lower wick.

The name comes from the shape of a star falling with a tail trailing above it. The same shape after a fall is an inverted hammer. It is the upside-down version of the hammer candle, and for the same reason: where the candle appears changes what it means. For how bodies and wicks are read in general, see candlestick basics.

The story the shooting star tells

Within one candle, buyers drive price well above the open. Sellers then take over and push it back near the open or lower. The long wick marks the price area that was rejected.

That is why location matters. A shooting star in the middle of a range is just a candle with a long wick. One that forms at a resistance level, or at the end of a bounce inside a downtrend, is a stronger clue because sellers were already expected there.

Shooting star, pin bar and doji

Candle	Shape	Typical reading
Shooting star	Small body low, long upper wick, after a rise	Possible bearish reversal
Inverted hammer	Same shape after a fall	Possible bullish reversal
Pin bar	Small body, one long tail, either direction	Rejection of a level
Doji	Open and close almost equal	Indecision

A bearish pin bar and a shooting star describe nearly the same candle. The term shooting star comes from candlestick books, and pin bar from price-action trading.

How to trade a shooting star

There is no single correct method. This is a common outline:

1. Context. The candle forms after a rise, ideally at resistance or at the end of a pullback within a downtrend.
2. Close. Wait for the candle to close. A long upper wick on a candle still forming can vanish in the last minutes.
3. Confirmation. Many traders wait for the next candle to close below the shooting star’s low. This delays the entry and removes some false signals.
4. Entry. Sell below the shooting star’s low, or at the close of the confirming candle.
5. Stop. Place it above the high of the shooting star, plus a buffer for the spread. A break of the high means the rejection failed.
6. Target. The next support level, or a multiple of the risk. See the risk-reward ratio.

Worked example (illustrative figures)

On a 4-hour GBP/USD chart, price rallies into resistance near 1.2700 and prints a shooting star with a high of 1.2748, a low of 1.2684 and a close of 1.2690. The next candle closes at 1.2672.

Item	Level	Distance
Entry (confirming close)	1.2672
Stop (above shooting star high, plus 2 pips)	1.2750	78 pips
Target	1.2516	156 pips
Reward to risk	2 to 1

With a 3,000 USD account risking 1% (30 USD), a 78-pip stop allows about 0.38 USD per pip. Use the lot size calculator for the lot size and position sizing for the method. If that stop is wider than your risk limit allows, skipping the trade is a valid choice.

Waiting for confirmation cost 12 pips compared with selling at the shooting star’s low of 1.2684. That is the price of fewer false signals.

Why shooting stars fail

• No level. Price had nothing to reverse from, so the wick says little.
• Uptrend continues. In a strong rise, a shooting star can be a pause. Buyers come back on the next candle and the high breaks.
• Hindsight. Finished charts show the shooting stars that worked. We have no verified statistic for how often one leads to a reversal, so treat success rates quoted online carefully.
• Wick caused by news. A spike during a data release reflects the event, not a level. Check the economic calendar.
• Tiny candles. A shooting star only a few pips tall can be spread noise, especially on low timeframes.

Using a shooting star with other tools

Many traders want a second reason before acting: a trend line, a moving average, an engulfing candle right after the star, or a higher timeframe pointing the same way. More conditions mean fewer trades, and fewer is not automatically better. Test any combination on a demo account and log the results.

Bottom line

A shooting star is a small-bodied candle with a long upper wick after a rise, showing a rejected high. It carries more weight at resistance, and many traders wait for a confirming candle before selling. Put the stop above the star’s high and size the position from that distance. Expect failures. Only risk money you can afford to lose. CFDs are complex, high-risk instruments.