TradingView - Shooting Star Pattern Screener

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  1. TradingView - Shooting Star Pattern Screener
    1. Introduction

The **Shooting Star** candlestick pattern is a bearish reversal pattern that often signals the potential end of an uptrend. Identifying this pattern manually across numerous charts can be time-consuming and inefficient. This article will detail how to leverage the powerful screening capabilities of TradingView to automatically identify stocks, forex pairs, cryptocurrencies, and other assets exhibiting the Shooting Star pattern, enabling traders to focus on analysis and potential trade execution. We will cover the pattern’s characteristics, its implications, how to build a screener in TradingView, and how to refine it for optimal results. Understanding and utilizing this screener can significantly enhance a trader’s ability to capitalize on potential market reversals. It's important to remember that no single indicator is foolproof, and the Shooting Star should always be used in conjunction with other technical analysis tools and risk management strategies.

    1. Understanding the Shooting Star Pattern

The Shooting Star is a single candlestick pattern that appears in an uptrend. It’s characterized by a small body at the lower end of the range, and a long upper shadow (or wick). The long upper shadow represents the price's initial attempt to move higher, but ultimately failing and closing near its low. Here’s a breakdown of the key characteristics:

  • **Uptrend Precondition:** The pattern is most significant when it appears after a sustained uptrend. This is crucial; a shooting star in a downtrend is less reliable. A strong uptrend provides the context for a potential reversal.
  • **Small Real Body:** The body of the candlestick (the difference between the open and close price) is relatively small, indicating indecision in the market. The smaller the body, the stronger the signal.
  • **Long Upper Shadow:** This is the defining feature. The upper shadow should be at least twice the length of the real body. The longer the shadow, the more pronounced the rejection of higher prices.
  • **Little or No Lower Shadow:** Ideally, the lower shadow (wick below the body) should be very small or non-existent. This indicates that buyers didn’t attempt to push the price lower during the period.
  • **Closing Price:** The closing price should be near the low of the period, further confirming the bearish sentiment.
    • Psychological Interpretation:** The Shooting Star pattern suggests that buyers initially pushed the price higher, but sellers stepped in and overwhelmed them, driving the price back down. This signals a potential shift in momentum from bullish to bearish. The pattern visually depicts a "shooting star" reaching for the sky but then quickly falling back to earth.
    1. Building a Shooting Star Screener in TradingView

TradingView’s Pine Script allows you to create custom indicators and screeners. Here's a step-by-step guide to building a Shooting Star screener:

    • Step 1: Access the Pine Editor**
  • Log into your TradingView account.
  • Click on "Chart" to open a chart.
  • At the bottom of the screen, click on "Pine Editor."
    • Step 2: Write the Pine Script Code**

Here's a basic Pine Script code to identify the Shooting Star pattern:

```pinescript //@version=5 indicator("Shooting Star Screener", shorttitle="Shooting Star", overlay=true)

// Define parameters for pattern recognition bodySize = close - open upperShadow = high - math.max(open, close) lowerShadow = math.min(open, close) - low

// Define conditions for the Shooting Star pattern isShootingStar = bodySize > 0 and upperShadow > 2 * bodySize and lowerShadow <= bodySize / 2

// Plot the pattern on the chart (optional) plotshape(isShootingStar, style=shape.triangledown, color=color.red, size=size.small, title="Shooting Star")

// Screener condition - returns true if Shooting Star is present isShootingStar ```

    • Explanation of the Code:**
  • `//@version=5`: Specifies the Pine Script version.
  • `indicator(...)`: Defines the indicator's name, short title, and whether it should be overlaid on the chart.
  • `bodySize = close - open`: Calculates the size of the candlestick body.
  • `upperShadow = high - math.max(open, close)`: Calculates the length of the upper shadow.
  • `lowerShadow = math.min(open, close) - low`: Calculates the length of the lower shadow.
  • `isShootingStar = ...`: Defines the core logic. It checks if the body is positive (meaning it's a bullish candlestick), if the upper shadow is at least twice the body size, and if the lower shadow is less than or equal to half the body size. These conditions define the Shooting Star pattern.
  • `plotshape(...)`: (Optional) Plots a red downward triangle on the chart wherever the Shooting Star pattern is identified. This helps visualize the pattern.
  • `isShootingStar`: This line is crucial for the screener. It returns `true` if the `isShootingStar` condition is met, signaling that the pattern is present. TradingView uses this return value to filter assets in the screener.
    • Step 3: Save the Script**

Click the "Save" button. Give your script a descriptive name (e.g., "ShootingStarScreener").

    • Step 4: Create a Screener**
  • Click on "Screener" at the top of the TradingView website.
  • Click on "Create New Screener".
  • Give your screener a name (e.g., "Shooting Star Reversal").
    • Step 5: Add Your Script to the Screener**
  • In the screener editor, click the "+" button to add a new condition.
  • In the search box, type the name of your saved Pine Script ("ShootingStarScreener").
  • Select your script from the search results.
  • The screener will now display a list of assets that meet the criteria defined in your script.
    1. Refining the Screener for Optimal Results

The basic screener above provides a starting point. To improve its accuracy and reduce false signals, consider these refinements:

  • **Volume Confirmation:** Add a condition to filter for Shooting Star patterns that occur with above-average volume. Higher volume suggests stronger conviction behind the bearish reversal.
  ```pinescript
  volume > ta.sma(volume, 20) // Check if volume is above its 20-period simple moving average
  ```
  Add this condition to the `isShootingStar` definition:
  ```pinescript
  isShootingStar = bodySize > 0 and upperShadow > 2 * bodySize and lowerShadow <= bodySize / 2 and volume > ta.sma(volume, 20)
  ```
  • **Support/Resistance Levels:** Filter for Shooting Star patterns that appear near significant support and resistance levels. A Shooting Star forming at resistance increases the likelihood of a reversal. You'll need to incorporate logic to identify these levels, which can be complex. Consider using existing TradingView indicators that identify support and resistance.
  • **Trend Filter:** Ensure the asset is in a clear uptrend *before* the Shooting Star appears. You can use a moving average crossover or other trend-following indicators to confirm the uptrend.
  ```pinescript
  ta.crossover(ta.sma(close, 20), ta.sma(close, 50)) // Example: 20-period SMA crosses above 50-period SMA
  ```
  Add this to your `isShootingStar` definition as well.
  • **Risk/Reward Ratio Consideration:** While not directly part of the screener, consider adding a filter based on potential risk/reward ratios. After identifying a Shooting Star, manually analyze the chart to assess the potential profit target and stop-loss placement. Only consider trades with a favorable risk/reward ratio. This is best done *after* the screener has identified potential candidates.
  • **Timeframe Selection:** The effectiveness of the Shooting Star pattern can vary depending on the timeframe. Experiment with different timeframes (e.g., daily, hourly, 15-minute) to find the one that works best for your trading style and the asset you're trading. Adjust the parameters in your Pine Script accordingly.
  • **Pattern Variations:** Explore variations of the Shooting Star pattern, such as the Dark Cloud Cover, which also signals a potential reversal. You could add conditions to your screener to identify both patterns.
  • **Combining with Other Indicators:** Combine the Shooting Star screener with other technical indicators, such as the RSI (Relative Strength Index), MACD (Moving Average Convergence Divergence), or Stochastic Oscillator, to confirm the bearish signal. For example, you could look for a Shooting Star pattern accompanied by overbought conditions on the RSI.


    1. Common Pitfalls and Considerations
  • **False Signals:** The Shooting Star pattern is not always accurate. Be aware of the possibility of false signals, especially in volatile markets. Always confirm the pattern with other indicators and analysis.
  • **Market Context:** As mentioned earlier, the pattern is most reliable when it appears after a clear uptrend. Pay attention to the overall market context.
  • **Stop-Loss Placement:** Proper stop-loss placement is crucial for managing risk. Typically, a stop-loss order is placed slightly above the high of the Shooting Star candlestick.
  • **Take-Profit Levels:** Identify potential take-profit levels based on support levels, Fibonacci retracements, or other technical analysis techniques.
  • **Backtesting:** Before relying on the screener, backtest your strategy using historical data to assess its performance and identify potential weaknesses. TradingView allows you to backtest Pine Script strategies.
  • **Broker Integration:** TradingView integrates with several brokers. Consider connecting your brokerage account to execute trades directly from the platform (check for compatibility with your broker).
    1. Advanced Techniques
  • **Alerts:** Set up alerts in TradingView to notify you when a Shooting Star pattern appears on specific assets. This allows you to react quickly to potential trading opportunities.
  • **Pine Script Customization:** Learn more about Pine Script to customize your screener and add more sophisticated filtering criteria. The TradingView documentation ([1](https://www.tradingview.com/pine-script-docs/en/v5/)) is an excellent resource.
  • **Multiple Screeners:** Create multiple screeners with different parameters to identify a wider range of potential trading opportunities.
  • **Portfolio Management:** Use the screener to monitor your existing portfolio and identify potential exit points for long positions.
    1. Resources for Further Learning

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