CuddlyCuddles

No, No, The Monthly Is not a Shooting Star Candlestick.

BITFINEX:BTCUSD   Bitcoin / U.S. Dollar
I have heard too many people incorrectly state that these two monthly candlesticks are shooting stars; when, in fact, they are not shooting stars.
In order to clarify this confusion, it is important to properly define what a shooting star candlestick is and its counterparts because the shooting star is actually a special case of the inverted hammer . The shooting star is a candle stick with a small real body and a large upper shadow (wick) and either no lower shadow or a small lower shadow. Since we now know what shooting stars look like, we must learn what makes them a shooting star , and here is the criteria: 1.) It has a higher high than the previous candles, 2.) It has higher volume than the average volume of surrounding candles (This may not always be the case), 3.) There was an uptrend.

When we look at the chart presented above, we can see that the two monthly candlesticks of July and August do occur after an uptrend, however, they do not hit higher price points nor do they have higher volume than preceding candlesticks . In addition, the month of July does not exhibit a small lower shadow and the body is of questionable size. However the month of August does exhibit the appearance of a shooting star , but it does not have a higher high than any of the preceding candles.

Finally, the shooting star does not always mean a bearish reversal, it needs to be combined with a multitude of other factors for this event to occur. It is highly possible that the shooting star is a signal for trendless-ness rather than a price retracement.

What I have does with this chart and what it means:

In magenta, I have denoted the center of the large bullish candlestick and the highest and lowest price. In light blue, I have denoted the center of the body and the lowest and highest price of the body. In candlestick analysis, the median (center) price of the candle stick is an important point to hold and it can be seen that it mostly acted as support. Since the bodies of July and August are all within the body of June and above its median price it highly probable that this is a consolidation, however, consolidations do fail, but currently there is no sign of this failing on the monthly time frame.


**Shooting Stars will be posted in the updates for reference.**
Sep 04
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Sep 04
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Sep 04
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Sep 04
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Sep 04
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Very good description !
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CuddlyCuddles Bullandbeartrading
@Bullandbeartrading, Thank you! I hope it helps!
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Nice one!
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CuddlyCuddles VincePrince
@VincePrince, Thank you, I appreciate your comment!
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