The height of the candlestick (the difference between high and low price) is tall enough and it's more than the Daily ATR(264). The taller the Candlestick is, the stronger the Shooting Star.
The upper shadow (also known as upper wick or tail is the distance between the high price and the close or open price, whichever is higher) should be very tall, over than 75 percent of the Daily ATR(264) is better.
The lower shadow (also called bottom wick or tail is the distance between the low price and the close or open price, whichever is lower) is nonexistent or very short. It should be less than 25 percent of the Daily ATR(264).
The Shooting Star with the bearish body is stronger than the one with the bullish body.
- The picture shows a perfect Shooting Star candlestick .
As seen, the height of the candlestick is tall, but the body is very short. Also, the upper shadow is very tall and the lower shadow is very short.
The close price is lower than open price, therefore the body of this Shooting Star is bearish , and the strength is very high.
So you’re using the ATR in the Daily chart of the whole year instead of the typical 14 period that the indicator tends to have as a default?
JackieHuynh
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may I ask what Daily ATR(264) is ? thanks
ForecastCity
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@SamHuynh, ATR stands for Average True Range, it is the average price change indicator, 264 is the count of the days of a year excluding weekends, so ATR(264) is the average of daily price change in the recent year, it reveal the range we can expect for a security.