Shooting star and inverted hammer: the long upper wick and what it records
Turn the hammer upside down and you have this module. A small body at the bottom of the range, an upper wick at least twice the body, little or no lower wick. After an advance, at resistance, the shape is a shooting star and records a high that buyers reached and sellers fully rejected. After a decline, the same shape is an inverted hammer and records that buyers were able to push a long way up inside a falling market, even though they could not hold it, which is a first sign of demand. The shooting star is the stronger of the two, exactly as the hammer is stronger than the hanging man, and for the same reason: the wick points into the level and away from the prior move. Gold is a market that prints long upper wicks often, at session opens and on news, so this module also spends time on telling a genuine rejection from a spike.
The shape, measured
The measurements mirror the hammer. The upper wick must be at least twice the height of the body, with two to three times as the classic rule and longer being better. The body must sit in the bottom third of the range. The lower wick should be small, no more than about ten percent of the range; a longer lower wick means the low was also rejected and the candle is becoming a spinning top or a long-legged doji. Colour does not decide the pattern, though a bearish body, close below open, is slightly better for a shooting star because the close is at the very bottom. Measure before you name. The eye is drawn to upper wicks on gold because the metal spikes often, and a candle whose upper wick is 1.5 times its body with a decent lower wick is a candle with an upper wick, not a shooting star. The ratio rule exists to stop you from seeing a reversal in every candle that briefly poked higher.
The shooting star: a high tested and rejected
A shooting star forms after an advance. During the period buyers continued the move, driving price well above the open, and then sellers absorbed that buying and pushed price back down to close near the low. The long upper wick is the ground buyers took and lost. In context, at a resistance level after a run, it is a strong statement: the buying that had been in control ran into supply and could not keep its gains. The context it needs is an advance in front of it and a level above it, a resistance, a previous day high, a higher-timeframe swing, the top of a range. With both, the shooting star is a topping candle worth planning a short around. Without the level it is weaker, and without the advance it is a different candle, a spike sold inside a range. The pattern is close kin to the gravestone doji from Module 4; the gravestone is a shooting star whose body has shrunk to nothing, and the two are read and traded identically.
The inverted hammer: the same candle after a decline
An inverted hammer is the shooting star shape printed after a decline, usually at or near support. The same contest happened inside it: buyers pushed price up a long way, sellers knocked it back down. But in a falling market, the fact that buyers could push so far above the open at all is the news; it shows demand testing the market for the first time. The failure to hold the high shows sellers are still present, which is why the inverted hammer is a tentative signal rather than a reversal. It is the weakest of the four single-wick patterns in Modules 5 and 6. It becomes a long idea only when the next candle closes above the inverted hammer high, because that shows buyers repeated the push and held it. Many inverted hammers are followed by a hammer or a bullish engulfing candle, and that second candle is the one worth trading. Read the inverted hammer as a candle that lowers your confidence in shorts, not as a reason to buy.
What the long upper wick records on gold
Gold produces long upper wicks for several reasons, and they do not all mean the same thing. A wick printed over an hour of two-way trading at a level, where price pushed up gradually, met offers and sold off through the close, is a genuine rejection: supply was present at those prices and it won. A wick printed in a few seconds on a data release, where the market was briefly thin and price shot up and back before anyone could act, is a liquidity event; it tells you where stops were, not where sellers are waiting. A wick at the London or New York open, where a burst of orders drives price into a level and it is faded through the session, is often a genuine rejection and one of the best gold shooting stars there is. You cannot always tell the three apart from the H1 candle alone, but you can from the M5 chart inside it and from the time the wick printed. Module 14 shows the lower-timeframe check and Module 15 covers the news case. The general rule is that a wick built over time is worth more than a wick built in an instant.
Confirmation, entry and stop
A shooting star is confirmed when the next candle closes below the shooting star body, and the stronger confirmation is a close below its low. That close shows the sellers who rejected the high were willing to sell lower than the star close, which separates a rejection from a pause. The direct entry is on the confirming close. The pullback entry waits for price to retrace into the star body or the bottom of the wick and sells there, with a tighter stop. The stop goes above the wick high in both cases, with an allowance for spread, because a trade above that high means the rejection has been undone. The first target is the nearest structural level below: the last swing low, the previous day low, the bottom of the range. For an inverted hammer long the rules invert: confirmation is a close above the wick high, the stop sits below the inverted hammer low, and the target is the nearest level above. In both cases, the candle without the confirming close is a candle, not a trade.
Shooting star, gravestone and a plain wick in a trend
Three candles get confused here. The shooting star has a small body at the bottom and a long upper wick. The gravestone doji is the same with no body at all, and it is traded the same way. The third is a plain upper wick on an ordinary candle inside a trend, which is not a pattern. During a strong advance on gold, individual candles frequently poke above their close and give back a few dollars; those are normal and show nothing but a rising market with the occasional seller. The difference is the ratio and the location. A wick twice the body at a resistance level after an extended run is a shooting star. A wick equal to the body in the middle of a trend is a trending candle. The context rule from Module 3 does the sorting: if there is no level and no extended move, the candle does not get the name. Keep that discipline and the shooting star stays a rare, useful pattern instead of something you see every hour.
A gold-specific note on session spikes
Because the metal is so sensitive to the United States session, the most reliable shooting stars on gold tend to print on the H1 chart during the first hour or two of New York trading, when an early push into an obvious level is sold by the afternoon. The least reliable are those printed at the exact minute of a scheduled release, where the wick is a liquidity gap rather than a rejection. A simple practice sorts most of them: note the time of the candle and, if it coincided with a release, drop to M5 and look at how the wick was built. A wick that took one M5 candle to make and one to unwind is a spike. A wick that took the whole hour of selling to unwind is a rejection. The hero image on this module shows both cases side by side so you can fix the difference visually. Combine this with the location rule and the two-to-one ratio and the shooting star becomes one of the more dependable topping clues gold offers, provided you always wait for the confirming close.
FAQ
What is a shooting star candlestick?
A candle with a small body in the bottom third of its range, an upper wick at least twice the height of the body, and little or no lower wick, formed after an advance. It records a high that buyers reached and sellers fully rejected. It needs a level above it and a confirming close below its body before it is a trade.
What is the difference between a shooting star and an inverted hammer?
The context. The same shape after an advance is a shooting star, a topping clue. After a decline it is an inverted hammer, a tentative sign that demand is testing a falling market. The shooting star is the stronger pattern; the inverted hammer needs a close above its high and is often confirmed by a hammer or engulfing candle that follows.
Where does the stop go on a shooting star trade?
Above the wick high with an allowance for spread. A trade above that high means the rejection the star recorded has been undone. For an inverted hammer long, the stop goes below the inverted hammer low.
How do I tell a real rejection from a news spike on gold?
Note the time of the candle, and if it coincided with a scheduled release, drop to M5 and see how the wick was built. A wick made and unwound in a minute or two is a spike that reflects thin liquidity. A wick unwound over the whole hour by steady selling is a rejection, and wicks built over time are worth more.
Is a shooting star the same as a gravestone doji?
Almost. The gravestone is a shooting star whose body has shrunk to a line, so the close is back at the open. They record the same full rejection of the high and are traded the same way, with confirmation on the next close and the stop above the wick.