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Written and copyright © 2008-2010 by Thomas N. Bulkowski. All rights reserved.
In my book,
Encyclopedia of Candlestick Charts  , pictured on the right,
I explore the entire range of candlestick patterns from abandoned babies to windows (not exactly A to Z, but you get the idea), in both bull and bear markets, using almost 5 million candle lines
in the tests.
The book takes an in-depth look at 103 candlestick patterns and reports on behavior and rank (3 types: reversal rate, frequency, and overall performance), identification guidelines,
performance statistics (tables of general statistics, height, and volume), trading tactics (tables of statistics on reversal rates and performance indicators),
and wraps each chapter with a sample trade. I share a sliver of that information below. If you like what you read here, then you will love the book. Help support this website and buy a copy
by clicking on the above link.
The shooting star comes in two varieties: one and two candle lines. This page discusses the two line shooting star. The reason for the
two patterns is that I found both described on websites, so I analyzed their behavior. The single line shooting star acts as a bearish reversal, but not the two line version.
It acts as a bullish continuation pattern 61% of the time. Its overall performance is well down the list, ranking 52 out of 103 candlestick types where a rank of 1 means the best performance.
Important Results
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Theoretical performance: Bearish reversal
Tested performance: Bullish continuation 61% of the time
Frequency rank: 51
Overall performance rank: 52
Best percentage meeting price target: 52% (bull market, up breakout)
Best average move in 10 days: -4.93% (bear market, down breakout)
Best 10-day performance rank: 31 (bear market, down breakout)
All ranks are out of 103 candlestick patterns with the top performer ranking 1. "Best" means the highest rated of the four combinations of bull/bear market, up/down breakouts.
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 Shooting Star
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Discussion
This version of the shooting star is a two line pattern. The first candle is a white day followed by a small bodied candle with a large upper shadow. The gap between the two candles
suggests upward momentum is rampant, but the tall upper shadow -- at least three times the height of the body -- suggests the bulls could not hold onto their gains. The movement from a white
candle to a second candle with a tall upper shadow and small body illustrates that momentum is fading. But that is not what happens in reality. The pause is just a momentary glitch along
the way to a new high. The two line shooting star acts as a continuation of the existing price trend.
The overall performance rank is mid list at 52, where 1 is best out of 103 candlestick types. The best average move 10 days after the breakout is a decline of 4.93% in a bear market.
That ranks just 31. A good performance would be a move of at least 6%.
Identification Guidelines
| Characteristic | Discussion |
| Number of candle lines | Two. |
| Price trend leading to the pattern | Upward |
| Configuration | Look for two candles in an upward price trend. The first candle is white followed by a small bodied candle with an upper shadow at least three times the height of the body.
The candle has no lower shadow or a very small one and there is a gap between the prices of the two bodies. The second candle can be any color. |
Three Trading Tidbits
If you want a few bones from my Encyclopedia of candlestick charts book, here are three to chew on. The pages refer to the book
where the tips appear.
- Shooting stars that appear within a third of the yearly low perform best -- page 670.
- Shooting star candles within a third of the yearly high act as continuation patterns most often -- page 673.
- Volume gives performance clues -- page 673.
Example
The figure shows a two-line version of the shooting star, circled in red. A white candle is the first line in the pattern
followed by the star line. The body is small with a tall upper shadow and little or no lower shadow. A gap, which looks tiny in this case, exists between the bodies of the two candles.
In this example, price breaks out upward when it closes above the top of the candle pattern.
This is a good example of a shooting star acting as a continuation of the existing price trend and not a reversal as candle theory suggests. With a continuation rate of 61%, that is
not very far from random, but expect these types of setups to show a resumption of the price trend.
The numbers also suggest that the price trend after the breakout does not take
price far. Thus, a trend reversal could be just days away.
-- Thomas Bulkowski
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