A trader who went short at the open of the next candle would be in profit as the market declined heavily on Wednesday and Thursday before profit-taking came in on Friday. You can use the shooting star pattern to trade some bearish reversal chart patterns, such as the head and shoulders pattern, the double top pattern, and the triple top pattern. In a down-trending market, you can use the shooting star pattern to short rallies in a downtrend. To trade this strategy, you will need to confirm that the price is in a downtrend and then look for possible resistance levels where a rally can reverse. When the price gets to that level, wait for a shooting star pattern to form and then enter a short position. It signals that sellers are losing power and are being outnumbered by buyers. Traders look for the hammer pattern as a signal to buy, as it suggests that the price will likely rise in the near future. A candlestick pattern is a visual representation of price movements within a specific timeframe, showing open, high, low, and closed prices. Traders use them to identify market sentiment, trend reversals, and momentum shifts for better trade […]
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