MadCow

The candle that forms after the shooting star is what confirms the shooting star candle. The next candle must fail to make a higher high and then proceed to close under the close of the prior candle. This represents the trapped buyers who quickly realize they may have overpaid for the position as the price stops rising. When the second candle closes lower than the prior candle low, it indicates that every buyer on the shooting star candle is now underwater. The tension builds until the proverbial trap door opens. Greed turns into fear as liquidity vaporizes, which in turn causes more panic selling. This can form a new series of falling candles with lower lows, representing a price pullback that could turn into a trend reversal.

Lim_CH

Reply to @derenceho : Hey, thanks for the detailed answer. So what about the formation of a hammer/hanging man candle right after the shooting star candle? And the price didn't managed to close below the shooting star candle's close. What does it mean then?

joannepang

If it is a black hammer then indicate weakness
A shooting star must follow by a strong white bar for trend to continue

Lim_CH

Reply to @joannepang : Hmm change of trend? I think a correction?

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2V_

Would prefer Bar chart than candle sticks, the Americans are controllers , Japs are followers now OoL

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