What is a Hammer Candlestick?
A Hammer candlestick usually appears at the end of a downtrend. Its features include:
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A small body near the top of the candle.
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A long lower shadow (wick).
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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:
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Spotting potential bottoms after a series of falling candles.
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More reliable when confirmed by high trading volume.
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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:
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A small body near the bottom of the candle.
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A long upper shadow (wick).
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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:
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Spotting potential market tops after a strong rally.
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Stronger when followed by a bearish candle.
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Useful for identifying overheated markets.
Hammer vs Shooting Star: The Key Differences
Even though both candlestick patterns have small bodies and long wicks, the market context and direction make them very different:
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Trend Appearance
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Hammer: Appears at the end of a downtrend.
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Shooting Star: Appears at the end of an uptrend.
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Wick Direction
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Hammer: Has a long lower wick with little or no upper wick.
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Shooting Star: Has a long upper wick with little or no lower wick.
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Signal Type
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Hammer: Suggests a bullish reversal (price may move up).
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Shooting Star: Suggests a bearish reversal (price may move down).
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Market Psychology
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Hammer: Indicates buyers stepping in and gaining strength after selling pressure.
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Shooting Star: Indicates sellers taking control after buyers lose momentum.
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Best Use in Trading
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Hammer: Best for spotting potential bottoms.
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Shooting Star: Best for spotting potential tops.
How to Use These Patterns Wisely
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Don’t rely on one candle alone. Always confirm with support/resistance levels, trendlines, or indicators like RSI and moving averages.
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Look for confirmation candles. A hammer should be followed by a green candle; a shooting star should be followed by a red candle.
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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.
