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What is a shooting star candlestick pattern?
A shooting star candlestick pattern is a bearish reversal pattern commonly used in technical analysis. It appears at the end of an uptrend and signals a potential trend reversal. The pattern is characterized by a small real body at the lower end of the price range, with a long upper shadow or wick that is at least twice the length of the body. The upper shadow represents the failure of the buyers to sustain the upward momentum, indicating a shift in market sentiment.

The shooting star pattern suggests that the bulls initially took control of the market, pushing prices higher, but eventually lost their strength, allowing the bears to push the price back down. It is considered a bearish signal because it implies that the selling pressure has increased and a potential downtrend may follow.

Traders often look for confirmation signals, such as a subsequent bearish candle or a decline in volume, to validate the shooting star pattern before making trading decisions. Stop-loss orders can be placed above the high of the shooting star to manage risk. However, it is important to consider other factors and indicators in conjunction with the shooting star pattern to make well-informed trading choices, as it is not always a guaranteed predictor of future price movements.

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