Hammer vs Shooting Star: Spotting the Difference in Real Trading

What is a Hammer Candlestick?

A Hammer candlestick usually appears at the end of a downtrend. Its features include:

• A small body near the top of the candle.

• A long lower shadow (wick).

• Little or no upper wick.

Meaning: The hammer shows that sellers pushed prices lower, but buyers stepped in strongly to push the price back up. This makes it a bullish reversal signal.

Best Use in Trading:

• Spotting potential bottoms after a series of falling candles.

• More reliable when confirmed by high trading volume.

• Works best if followed by another bullish candle.

What is a Shooting Star Candlestick?

A Shooting Star candlestick forms at the end of an uptrend. Its key features are:

• A small body near the bottom of the candle.

• A long upper shadow (wick).

• Very little or no lower wick.

Meaning: The shooting star signals that buyers tried to push prices higher but lost control to sellers by the close. This makes it a bearish reversal signal.

Best Use in Trading:

• Spotting potential market tops after a strong rally.

• Stronger when followed by a bearish candle.

• Useful for identifying overheated markets.

How to Use These Patterns Wisely

• Don’t rely on one candle alone. Always confirm with support/resistance levels, trendlines, or indicators like RSI and moving averages.

• Look for confirmation candles. A hammer should be followed by a green candle; a shooting star should be followed by a red candle.

• Check volume. High trading volume during these patterns makes them more reliable.

Final Takeaway

The Hammer vs Shooting Star candlestick patterns may look similar, but their meaning in real trading is the opposite. The hammer signals buyer strength after a decline, while the shooting star warns of seller strength after a rally.