GBPAUD 1H SHOOTING STAR CANDLE STRATEGY
Step #1: Attach the Chaikin Money Flow Indicator on your Preferred Time Frame
Start first by preparing your charts ready for the battle. Simply attach the Chaikin Money Flow indicator on your favorite time frame. This is the only additional technical tool we’re going to use to confirm the validity of the bearish shooting star pattern.
Using the CMF indicator we accomplish one major thing.
The validity of the bearish shooting star will be confirmed or invalidate instantly as soon as the bearish inverted hammer develops on our Bitcoin candlestick chart. This means that the price won’t move any further from the ideal entry price.
Step #2: The Shooting Star Candle should come after a strong bearish trend
The location or in other words, where the shooting star candlestick develops matters a lot.
This whole ingredient is what makes the bullish shooting star candle performs with such a high degree of accuracy. We need a strong downtrend that has two important features:
The first part of the trend is a slow and steady move to the downside
The last part of the uptrend, prior to the shooting star candle, needs to be more volatile.
Basically, we’re looking for a full-blown market bottom where the bears are exhausted and reach a climax point.
Step #3: The CMF indicator must be above the 0 line once the bullish shooting star candle develops
The Chaikin Money Flow is a great tool to read and measure institutional accumulation-distribution activity in any market. Basically, a CMF reading above the zero line shows that the buyers have the upper hand and they took control of the market.
Notice that the bullish shooting star spotted satisfies all the requirements of a bullish inverted hammer. The shadows are at least two times longer than the body; small body; and very little upper shadow. This candle would have been more powerful if the closing price is above the opening price.
But it’s still a good pattern to trade due to all the other features.
Now, it’s time to highlight how to find the right entry point for bullish shooting star candlestick.
Step #4: Buy once we break the high of the Shooting Star Candle
Simply, place a buy stop order above the high of the shooting star. Nothing complicated about our entry strategy. It’s in line with the textbook rule.
Step #5: Hide SL below the low of the Shooting Star Candle.
Simply hide your protective SL below the low of the shooting star pattern. You can add a buffer of a few pips if you wish to protect against possible false breakouts.
Step 6: TP when we get inside the slow part of the prevailing trend or you choose your TP strategy.
The full-blown bottom creates the necessary space where the bulls would find no level of support to stop the drop. The last stage of a trend has been always more volatile. And, when combined with the reversal shooting star pattern, it makes for a killer trading strategy.
Reverse strategy for a Bearish Shooting Star Strategy.
Start first by preparing your charts ready for the battle. Simply attach the Chaikin Money Flow indicator on your favorite time frame. This is the only additional technical tool we’re going to use to confirm the validity of the bearish shooting star pattern.
Using the CMF indicator we accomplish one major thing.
The validity of the bearish shooting star will be confirmed or invalidate instantly as soon as the bearish inverted hammer develops on our Bitcoin candlestick chart. This means that the price won’t move any further from the ideal entry price.
Step #2: The Shooting Star Candle should come after a strong bearish trend
The location or in other words, where the shooting star candlestick develops matters a lot.
This whole ingredient is what makes the bullish shooting star candle performs with such a high degree of accuracy. We need a strong downtrend that has two important features:
The first part of the trend is a slow and steady move to the downside
The last part of the uptrend, prior to the shooting star candle, needs to be more volatile.
Basically, we’re looking for a full-blown market bottom where the bears are exhausted and reach a climax point.
Step #3: The CMF indicator must be above the 0 line once the bullish shooting star candle develops
The Chaikin Money Flow is a great tool to read and measure institutional accumulation-distribution activity in any market. Basically, a CMF reading above the zero line shows that the buyers have the upper hand and they took control of the market.
Notice that the bullish shooting star spotted satisfies all the requirements of a bullish inverted hammer. The shadows are at least two times longer than the body; small body; and very little upper shadow. This candle would have been more powerful if the closing price is above the opening price.
But it’s still a good pattern to trade due to all the other features.
Now, it’s time to highlight how to find the right entry point for bullish shooting star candlestick.
Step #4: Buy once we break the high of the Shooting Star Candle
Simply, place a buy stop order above the high of the shooting star. Nothing complicated about our entry strategy. It’s in line with the textbook rule.
Step #5: Hide SL below the low of the Shooting Star Candle.
Simply hide your protective SL below the low of the shooting star pattern. You can add a buffer of a few pips if you wish to protect against possible false breakouts.
Step 6: TP when we get inside the slow part of the prevailing trend or you choose your TP strategy.
The full-blown bottom creates the necessary space where the bulls would find no level of support to stop the drop. The last stage of a trend has been always more volatile. And, when combined with the reversal shooting star pattern, it makes for a killer trading strategy.
Reverse strategy for a Bearish Shooting Star Strategy.
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