What is shooting star in forex

What is shooting star in forex

By: andalusia Date: 20.06.2017

A shooting star is a type of candlestick formation that results when a security's price, at some point during the day, advances well above the opening price but closes lower than the opening price. For a candlestick to be considered a shooting star, the formation must be on an upward or bullish trend, and the distance between the highest price for the day and the opening price must be more than twice as large as the shooting star's body.

The distance between the lowest price for the day and the closing price must be very small or nonexistent. Shooting stars indicate potential price tops and reversals. The shooting star candle is most effective when it forms after a series of at least three or more consecutive rising candles with higher highs.

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As the price rises, buyers get impatient waiting for a pull back, and leap frog over one another to purchase shares. Eventually, the buying frenzy hits a peak as the last of the immediate buyers jump into the stock or any financial instrument in a greed-driven panic to mark the highest high of the preceding series of candles.

The earlier buyers eventually begin to take profits, and short-sellers enter into the stock, causing an immediate price drop after hitting a new what is shooting star in forex. The candle closes with a wick or shadow that forex squawk box free at least twice the size of the body.

what is shooting star in forex

The wick or shadow represents the buyers who book make money reading tarot cards immediately under water as liquidity starts to dry up.

This is the potential shooting star candle. The very next candle will confirm whether it is a shooting star or a continuation candle.

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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.

what is shooting star in forex

This represents the trapped buyers who quickly realize they may have overpaid where to buy stockholm card 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.

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This can form a new series of falling candles with lower lows, representing a price pullback that could turn into a trend reversal. Dictionary Term Of The Day. A measure of what it costs an investment company to operate a mutual fund. Latest Videos PeerStreet Offers New Way to Bet on Housing New to Buying Bitcoin?

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Sophisticated content for financial advisors around investment strategies, industry trends, and advisor education. What is a 'Shooting Star' A shooting star is a type of candlestick formation that results when a security's price, at some point during the day, advances well above the opening price but closes lower than the opening price. Psychology of Shooting Stars The earlier buyers eventually begin to take profits, and short-sellers enter into the stock, causing an immediate price drop after hitting a new high.

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Shooting Star Confirmation The candle that forms after the shooting star is what confirms the shooting star candle. Evening Star Morning Star Bullish Engulfing Pattern Three Stars in the South On Neck Pattern. Content Library Articles Terms Videos Guides Slideshows FAQs Calculators Chart Advisor Stock Analysis Stock Simulator FXtrader Exam Prep Quizzer Net Worth Calculator.

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