{"id":517,"date":"2026-01-21T10:00:49","date_gmt":"2026-01-21T09:00:49","guid":{"rendered":"https:\/\/round-robin.eu\/blog\/?p=517"},"modified":"2026-01-20T18:35:32","modified_gmt":"2026-01-20T17:35:32","slug":"case-study-eurusd-shooting-star-inverted-hammer","status":"publish","type":"post","link":"https:\/\/round-robin.eu\/blog\/case-study-eurusd-shooting-star-inverted-hammer\/","title":{"rendered":"Pattern Spotted: Long Upper Shadow"},"content":{"rendered":"\r\n<p class=\"wp-block-paragraph\"><em><small>Pattern Spotted is our Wednesday format that showcases real-world applications of Monday&#8217;s Pattern Decoded. This week: <strong>Long Upper Shadow.<\/strong><\/small><\/em><\/p>\r\n\r\n<p><!--more--><\/p>\r\n<hr class=\"wp-block-separator\" \/>\r\n\r\n\r\n<h2 class=\"wp-block-heading\">EUR\/USD: The King of Shooting Stars<\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Let&#8217;s start immediately with the king of Shooting Stars: EUR\/USD. From 2016, five out of six occurrences have been successful (one was not confirmed). Impressive.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Let&#8217;s focus on the period 2022-2026.<\/p>\r\n\r\n<div id=\"attachment_523\" style=\"width: 1034px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/eurusd-shooting-star.png\" data-lbwps-width=\"1888\" data-lbwps-height=\"894\" data-lbwps-srcsmall=\"https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/eurusd-shooting-star-300x142.png\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-523\" class=\"size-large wp-image-523\" src=\"https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/eurusd-shooting-star-1024x485.png\" alt=\"\" width=\"1024\" height=\"485\" srcset=\"https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/eurusd-shooting-star-1024x485.png 1024w, https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/eurusd-shooting-star-300x142.png 300w, https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/eurusd-shooting-star-768x364.png 768w, https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/eurusd-shooting-star-1536x727.png 1536w, https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/eurusd-shooting-star.png 1888w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><p id=\"caption-attachment-523\" class=\"wp-caption-text\">chart: EURUSD weekly &#8211; Shooting Stars<\/p><\/div>\r\n\r\n<h3 class=\"wp-block-heading\">Case 1: December 2022 &#8211; Setup Not Confirmed<\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Analyzing carefully, we see that the Shooting Star appeared the same day EUR\/USD broke above the MA50W (typically not a bearish confirmation).<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">The next week it was an inside bar.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">As we know from Pattern Decoded, the pattern requires either a price or a technical confirmation. <strong>None was present<\/strong>.<\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\">\u00a0<\/h3>\r\n<h3 class=\"wp-block-heading\">Case 2: February 2023 &#8211; Setup Confirmed (Bearish Success)<\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">A beautiful setup: not only the Shooting Star, but also a MA100W rejection AND an outside week candle (high extended the prior week&#8217;s high, low extended the prior week&#8217;s low) &#8211; we use white candles to show all outsides, hollow or filled.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">In this case, you don&#8217;t need the break of the low in the following week, since the reversal is supported by other evidence (at least, this is my approach).<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Of course, it would have been equally correct &#8211; by the manuals &#8211; to wait for the next week&#8217;s confirmation.<\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\">\u00a0<\/h3>\r\n<h3 class=\"wp-block-heading\">Case 3: December 2023 &#8211; Setup Confirmed (Bearish Success)<\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Also in this case, the Shooting Star was created by a moving average rejection (MA50W) &#8211; that&#8217;s a great validation.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Enough to place a trade without waiting for the next week&#8217;s close confirmation.<\/p>\r\n\r\n\r\n\r\n<h3 class=\"wp-block-heading\">\u00a0<\/h3>\r\n<h3 class=\"wp-block-heading\">Case 4: September 2025 &#8211; Setup Confirmed (Bearish Success)<\/h3>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">In this case, the moving averages didn&#8217;t help: the fastest MA5W to MA20W were too flat on prices. Therefore, a <strong>price confirmation was required.<\/strong><\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">The confirmation arrived with the close of the following week, which closed below the low.<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">\u00a0<\/h2>\r\n<h2 class=\"wp-block-heading\">How We Define a Shooting Star<\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Note about how we calculate the Shooting Star: it must be a 20-week market high, it must have an upper shadow AT LEAST 2x bigger than the body, AND a lower shadow less than 10% of the whole weekly range.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">&nbsp;<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Zero arbitrariness. That&#8217;s why we didn&#8217;t consider the following cases:<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">&nbsp;<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><strong>A) April 2023:<\/strong> There&#8217;s no Shooting Star &#8211; the upper shadow to body ratio isn&#8217;t respected.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><em>Devil&#8217;s Advocate: &#8220;Yeah, but it paid out!&#8221;<\/em><\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Yes, it did. But it&#8217;s not a Shooting Star, and in my opinion, the move was driven by the Long-Legged Doji of the following week, not the wannabe Shooting Star.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">&nbsp;<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><strong>B) April 4, 2025:<\/strong> A sweet, deep long shadow, but again, the 2:1 shadow-to-body ratio isn&#8217;t met. I guess in this case there&#8217;s no devil&#8217;s advocate since it would have been a loss.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">&nbsp;<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><strong>C) April 25, 2025:<\/strong> That&#8217;s really nice &#8211; a super long upper shadow and a very tiny body. BUT the lower shadow is not only present but bigger than the body. This is not a Shooting Star, even though the market reversed.<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">\u00a0<\/h2>\r\n<h2 class=\"wp-block-heading\">What Should You Have Learned From This?<\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">First, how to spot a Shooting Star on a chart.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Second, to be consistent. If you required once that the Shooting Star is a 20-week market top, you can&#8217;t accept next time a beautiful Shooting Star that&#8217;s only a 10-week high. If you married the 3:1 ratio, you can&#8217;t switch to 2:1 &#8211; you know, breaking a marriage can cost a lot. And if you waited for the next week&#8217;s close confirmation, keep doing it even if in hindsight you found out you could have anticipated.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\"><strong>Bonus:<\/strong> It works on all markets and on all timeframes (with different orders of magnitude, of course).<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">\u00a0<\/h2>\r\n<h2 class=\"wp-block-heading\">Does It Always Work?<\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">No, as with all statistical tools.<\/p>\r\n\r\n<div id=\"attachment_524\" style=\"width: 1034px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/brent-failed-shooting-star.png\" data-lbwps-width=\"1888\" data-lbwps-height=\"894\" data-lbwps-srcsmall=\"https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/brent-failed-shooting-star-300x142.png\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-524\" class=\"size-large wp-image-524\" src=\"https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/brent-failed-shooting-star-1024x485.png\" alt=\"\" width=\"1024\" height=\"485\" srcset=\"https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/brent-failed-shooting-star-1024x485.png 1024w, https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/brent-failed-shooting-star-300x142.png 300w, https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/brent-failed-shooting-star-768x364.png 768w, https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/brent-failed-shooting-star-1536x727.png 1536w, https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/brent-failed-shooting-star.png 1888w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><p id=\"caption-attachment-524\" class=\"wp-caption-text\">chart: Brent Oil weekly &#8211; Failed Shooting Star<\/p><\/div>\r\n\r\n<p class=\"wp-block-paragraph\">In this example on Oil (Brent), a terrible, painful failure.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">March 2024: a crystal-clear Shooting Star.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Everything was saying it was a perfect reversal signal.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">The long-term trend was bearish, short-term bullish, and the Shooting Star hit the MA100W. The high was lower than the prior high (September 2022)&#8230; the perfect storm.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Instead, two weeks later: a violent breakout to the upside&#8230; that turned out to be a bullish trap.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">This is one of the worst losses a trader can face from a psychological point of view: the right idea, stop loss gets hit, and then you watch prices almost immediately go in what was the right direction. But again, consistency&#8230; the next time, a good trader will have the same approach.<\/p>\r\n\r\n\r\n\r\n<h2 class=\"wp-block-heading\">\u00a0<\/h2>\r\n<h2 class=\"wp-block-heading\">The Inverted Hammer: A Legend?<\/h2>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">It&#8217;s very rare to see a long upper shadow at the lows of a bear market. Why?<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Here&#8217;s an example: if our setup requires a 20-candle low (any timeframe), and bulls come in strong, it&#8217;s likely that bears will start taking profits, so the candle often tends to close at the highs.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">Conversely, when prices have already been rising for 20 candles (any timeframe), bulls are more exposed both to profit-taking and to bears looking for a resistance point.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">The first scenario &#8211; asking for a reaction in a candle that started badly for those already in profit &#8211; is much less probable.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">&nbsp;<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">The Inverted Hammer is not only less likely to appear, but even less likely to provide a buy signal. Often (on major assets: indices, commodities, currencies), contrary to theory, the trend continues &#8211; maybe not for long, but the decline tends to persist.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">&nbsp;<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">For this reason, several technical analysts use workarounds (often ex-post) to explain how it actually works well. The two most common:<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">&nbsp;<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">1. It doesn&#8217;t need to be exactly at a low&#8230; just close to one.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">2. The price signal doesn&#8217;t need to be the very next candle (some accept 3-candle setups, some 5&#8230; some even more).<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">&nbsp;<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">I don&#8217;t favor tricks designed to make the numbers work.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">The first criterion is, in my view, aberrant.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">The second depends on how deep the subsequent move went and for how long.<\/p>\r\n\r\n\r\n\r\n<p class=\"wp-block-paragraph\">If the answer is &#8220;not much&#8221; for both, using the Inverted Hammer&#8217;s high as a bullish entry point makes sense &#8211; after all, it&#8217;s a resistance level.<\/p>\r\n\r\n<div id=\"attachment_525\" style=\"width: 1034px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/sp500-invertted-hammer.png\" data-lbwps-width=\"1888\" data-lbwps-height=\"894\" data-lbwps-srcsmall=\"https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/sp500-invertted-hammer-300x142.png\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-525\" class=\"size-large wp-image-525\" src=\"https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/sp500-invertted-hammer-1024x485.png\" alt=\"\" width=\"1024\" height=\"485\" srcset=\"https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/sp500-invertted-hammer-1024x485.png 1024w, https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/sp500-invertted-hammer-300x142.png 300w, https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/sp500-invertted-hammer-768x364.png 768w, https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/sp500-invertted-hammer-1536x727.png 1536w, https:\/\/round-robin.eu\/blog\/wp-content\/uploads\/2026\/01\/sp500-invertted-hammer.png 1888w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><p id=\"caption-attachment-525\" class=\"wp-caption-text\">chart: S&amp;P500 daily &#8211; Inverted Hammer<\/p><\/div>\r\n<!-- \/wp:post-content -->\r\n\r\n<!-- wp:paragraph -->\r\n<p>I&#8217;ll close with an example on S&amp;P 500 daily (November 4, 2017) of what I consider a true Inverted Hammer:<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:list -->\r\n<ul class=\"wp-block-list\">\r\n<li>a 20-candle low (in this example, 20 daily)<\/li>\r\n<li>the shadow-to-body ratio of at least 2:1 respected<\/li>\r\n<li>accompanied by at least one technical signal (MA200 holding)<\/li>\r\n<li>followed by price confirmation immediately at the close of the next candle<\/li>\r\n<\/ul>\r\n<!-- \/wp:list -->\r\n\r\n<!-- wp:heading -->\r\n<h2>\u00a0<\/h2>\r\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\r\n<!-- \/wp:heading -->\r\n\r\n<!-- wp:paragraph -->\r\n<p>This time, very personal conclusions &#8211; but statistically unassailable on daily and weekly charts:<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:paragraph -->\r\n<p><strong>Shooting Stars are excellent, yet can fail:<\/strong> They are perfectly identifiable and rarely fail to confirm the setup.<\/p>\r\n<!-- \/wp:paragraph -->\r\n\r\n<!-- wp:paragraph -->\r\n<p><strong>Inverted Hammers are not as reliable:<\/strong> They are even rarer than Shooting Stars. With a rigid algorithmic approach, they very often fail to confirm the setup (they often don&#8217;t break above the Long Upper Shadow&#8217;s high). Provocatively, I would say they actually qualify as perfect continuation patterns&#8230; albeit often for only a limited number of candles.<\/p>\r\n<!-- \/wp:paragraph -->","protected":false},"excerpt":{"rendered":"<p>Pattern Spotted is our Wednesday format that showcases real-world applications of Monday&#8217;s Pattern Decoded. This week: Long Upper Shadow.<\/p>\n","protected":false},"author":1,"featured_media":523,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[420],"tags":[594,588,438,590,563,565,559,75,592,596,598,30,561,10,600],"class_list":["post-517","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pattern-spotted-en","tag-brent-oil","tag-candlestick-pattern","tag-eurusd","tag-forex-trading","tag-inverted-hammer","tag-japanese-candlesticks","tag-long-upper-shadow","tag-moving-averages","tag-pattern-confirmation","tag-pattern-spotted","tag-reversal-signals","tag-sp-500","tag-shooting-star","tag-technical-analysis","tag-weekly-trading"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Pattern Spotted: Long Upper Shadow - RRTS Blog<\/title>\n<meta name=\"description\" content=\"EUR\/USD case study: how to identify and confirm Shooting Star and Inverted Hammer patterns. 5 winning trades out of 6 since 2016. 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