Shooting Star Trading Pattern

By | December 15, 2014

Monday, December 15th, 2014 by Tim Lanoue

Today we are going to cover a binary options trading pattern known as the Shooting Star, it actually feels weird to submit a strategic article for you guys that I haven’t composed on my own but in all honesty this is one of the those binary options trading patterns that should not be forgotten and should be utilized when trading binary options.

For those of you who are unfamiliar with the Shooting Star pattern it is a relatively simple trading pattern that can easily be used by traders of all experience levels, meaning novice and experienced traders would both benefit by learning and using this trading pattern. The main purpose of this trading pattern is to trade what is known as a reversal. For those of who not familiar with reversals they are exactly what they sound like they are, they are reversals that take place in the market.

The whole function of this trading pattern is to help traders predict when the price action of our targeted assets is going to conduct a reversal. Meaning that it will change directions and go the other way. This is relatively simply and straight up, one of the best advantages about this trading pattern is that it can be used by all assets. Meaning it doesn’t matter if we use a currency pair, stock, commodity or indice. However, when it comes to trading online with binary options I tend to trade only certain times and only certain assets if possible, below I will discuss my set up for using this trading pattern and how to implement it.

Before we dig deeper into the pattern portion, it is important to understand that with any binary options trading pattern you are more likely to find better success if you trade during market hours with a market hour trading pattern. The shooting star is a market hour oriented trading pattern and should not be used during intra-trading hours. When using this trading pattern or any other trading pattern you guys may have noticed that I tend to stick with only a handful of assets depending on their type. For example, I tend to only trade low volatility currency pairs, high volume stocks or highly popularized commodities. Rarely do I trade more than 6 different assets a week, it all depends on the trading pattern that I am using and the current market conditions. Moving forward, when using this trading pattern I would highly recommend using an asset from the following list: Eur/Usd, Usd/Cad, Usd/Chf, Nzd/Usd, Apple, Exxon, Facebook, Twitter, Gold, Silver, and Oil. Once you have chosen your asset then we are good to finish setting up our charting solution. The charting solution that I use is a web-based charting solution known as www.freestockcharts.com, for those of you not familiar with www.freestockcharts.com it is the best charting solution in my opinion and offers free access to all the indicators that I need.

In the picture above you can see an example of how this trading pattern would work. As you can see that the time frame that we use is Daily, meaning each Japanese Candle stick represents a time period of one day. The Shooting Star trading pattern is a pattern that is meant to take place over a period of two days, where the second day is the indicator of our reversal. As you can see in the picture we have four example of how this trading pattern would work. The first thing we need is a bullish candle by itself and then a bearish candle right next to it. The second candle is known as the origin where the shooting star takes it reversal. As you can see after the second candle we had a following bearish candle after, confirming that the trend did indeed reverse and our trades ended up in-the-money.
The Shooting Star trading pattern is a classic binary options trading pattern that should be used more often and not forgotten. Average expiry times that you should use when using this trading pattern should be 4 hours to End-Of-Day expiries, meaning the option will expiry at the last available time during market hours. As always guys if you have any questions, suggestions or comments please feel free to leave them below and I will get back to you as soon as possible!

Check out the BinaryoptionsChannel.com Extended Binary Options Indicators Explained List!

8 thoughts on “Shooting Star Trading Pattern

  1. RaazGull

    Can you please tell me which time frame is best for shooting star ….

    Reply
  2. Ross

    The best way I have found thus far to use the “shooting star” “method” is by looking at the big picture… When looking for a reversal as in the examples above… to confirm the reversal by indicators of the current price action and via multiple time frame analysis (in this instance weekly momentum for example)THEN ONLY AND ONLY THEN, AFTER A REVERSAL(OR EVEN A TREND) IS CONFIRMED, to then take advantage of it by “zooming” in to a smaller timeframe e.g hourly in this instance and to then search for entries in the same direction with your strategy of choice… I.O.W.. A double confimation-of a double confirmation. Just a thought. Happy trading traders:)

    Reply
  3. Tim Lanoue

    Hey Serge,

    Well considering this is a technical analysis trading strategy I don’t really see how fundamental analysis solely could possible work with this trading strategy…. However, you can use fundamental analysis in combination with this trading strategy… It is a great idea and game plan to always use fundamental analysis and technical analysis together with one another.

    Hope this helps you out!

    Tim

    Reply
  4. bob lee

    Tim, enjoy your articles. I hope you are in discussions with Justin in regard to his trading plan for our special account.Your reputation in this industry is worth a great deal

    Reply
  5. Ross

    Hi Tim, no you didnt;)!… Price action trading I shall bequeeth to thou seasoned veteran traders. Hope to be able to do it one day. Keep up the effort-I sincerely believe you are actually changing lives for the better. Cheers, keep well!

    Reply
  6. Tim Lanoue

    I never said it was a strong approach now did I? It is a very practical trading strategy and it is a variation of Price Action Trading Strategy and when used correctly it can yield great results. Here are just some of my previous results when using this trading strategy. Thank you for your honesty though, much appreciated and along with your compliments.

    Tim

    Reply
  7. Ross

    Don’t mean to be derogatory but this is a rather weak approach. Trend can change at any instant and in any direction especially if a more thorough technical and/or fundamental analysis isn’t applied. I’d have to think very hard before risking my money on this one. Sorry Tim, Have read your other articles and you have allot of valuable strategy. Thanks for all the info-it is much appreciated. Regards

    Reply

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