Shooting Star candlestick, a pattern of Japanese candlesticks used in technical analysis. The lesson can be summarized as follows:
Definition of Shooting Star candlestick:
Candle name: Shooting Star candlestick.
It appears after an upward trend, and often indicates a possible trend reversal.
The candle is at resistance levels or the top of the trend.
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Description of the candle:
It consists of a small body located at the bottom of the daily trading range.
The length of the upper shadow is approximately three times longer than the length of the candle body.
The lower shadow is often very small or non-existent.
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Its significance:
It means that buyers tried to push prices up, but sellers eventually prevailed and closed the candle near the opening price.
Expected: Prices will fall if the next red candle confirms the downward trend.
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Important notes:
If the red candlestick closes after the shooting star at a price lower than the shooting star's close, this increases the possibility of a decline.
It is advisable to pay attention to the trading volume; The increased selling volume after the shooting star candlestick supports the idea of a reversal.
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Example:
A practical example from the AOL chart is provided to show how the shooting star candlestick contributed to confirming the reversal after an uptrend, with increased selling volume.
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Note:
The saying goes that "a shooting star falls from the sky", indicating a strong decline after the appearance of this candlestick.
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