WEBVTT 00:10.150 --> 00:16.750 If we analyze the conditions needed to form the shooting star, we can see that this pattern is pretty 00:16.750 --> 00:19.410 much the opposite of the hammer. 00:19.480 --> 00:23.680 First of all we have a small real body just like the hammer. 00:23.860 --> 00:28.350 This time the real body is at the bottom end of the session's range. 00:28.390 --> 00:35.950 We have a very small or no lower shadow and a long upper shadow that should be at least twice the size 00:35.980 --> 00:40.420 of the height of the real body. Even for the shooting star, 00:40.420 --> 00:49.150 the colour is not important. Now last condition, as you might have guessed so far, is usually the most important 00:49.150 --> 00:50.180 one. 00:50.290 --> 00:55.180 The shooting star requires that the market is in an uptrend. 00:55.300 --> 01:00.990 So what does this candle say about the fight between buyers and sellers? 01:01.300 --> 01:04.910 The small lower shadow and the long upper shadow 01:05.050 --> 01:11.440 let us know that there hasn't been much action below the opening price and the buyers started very soon 01:11.440 --> 01:15.320 to push the price up. By the end of the session, 01:15.460 --> 01:23.080 sellers step into the market and the price goes down, closing near the opening price. In a short and 01:23.140 --> 01:30.730 easy way, we can say that buyers were in control at the beginning but sellers have been stronger by the 01:30.730 --> 01:32.970 end of the session. 01:32.980 --> 01:39.580 Here we have euro-dollar on a daily chart. I have highlighted in green all the candlesticks that have 01:39.580 --> 01:46.030 the same shape of a shooting star, but that I would not have considered because they don't satisfy last 01:46.030 --> 01:47.020 condition. 01:47.080 --> 01:54.570 That means that they don't appear during a clear uptrend. In yellow, you can see real shooting stars. 01:54.640 --> 02:02.650 They satisfy all the conditions. Then I have highlighted one in a kind of light purple because I'm 02:02.650 --> 02:04.720 not sure about that one. 02:04.750 --> 02:12.310 It appears after a move up, even if the price is still lower than the last high that has been formed by 02:12.310 --> 02:15.020 the first shooting star in yellow. 02:15.160 --> 02:21.730 I think that at that point I would have looked for other clues to understand if it was a good signal 02:21.730 --> 02:23.100 or not. 02:23.140 --> 02:28.810 So let's analyze the price action before the shooting stars highlighted in yellow; 02:28.810 --> 02:31.590 the price action of the shooting stars 02:31.720 --> 02:39.460 and then we can combine them to draw our conclusions. Before the shooting star, buyers are completely 02:39.460 --> 02:40.450 in control. 02:40.480 --> 02:42.780 The price is clearly going up. 02:43.120 --> 02:47.970 Then a shooting star appears. At the beginning of the shooting star, 02:48.010 --> 02:50.620 buyers push the price higher. 02:50.620 --> 02:52.280 This is not a surprise, 02:52.330 --> 02:56.120 after all the price was going up before the shooting star. 02:56.290 --> 03:00.780 So everyone is expecting that the price continues to go up. 03:00.790 --> 03:07.660 The surprise comes when sellers step into the market and push the price back near the opening of the 03:07.660 --> 03:08.840 session. 03:09.100 --> 03:11.400 So putting it all together, 03:11.470 --> 03:19.840 buyers have been too strong for sellers in last sessions, so you can see a lot of big green candles. 03:19.840 --> 03:20.650 At one point, 03:20.710 --> 03:28.090 a shooting star appears and is telling us that the sellers ended the session stronger than the buyers. 03:28.120 --> 03:34.360 This is probably because at that point the price started to be convenient for sellers to open their 03:34.360 --> 03:36.890 short positions. 03:36.910 --> 03:42.700 I think that now you're starting to understand better how to analyze the patterns and the supply and 03:42.700 --> 03:44.560 demand game on the market. 03:44.620 --> 03:48.250 So you also understand why the color doesn't matter. 03:48.250 --> 03:54.310 The important thing is that sellers recovered from a very bad start of the session. 03:54.310 --> 03:59.780 So, as for the hammer, it is not about the color but about the size. 03:59.800 --> 04:07.990 The longer the upper shadow, the shorter the lower shadow, the smaller the real body, the more meaningful 04:07.990 --> 04:09.700 the shooting star will be.