The same holds true for the bearish inside bar pictured above – the formation at the lower range of the mother bar is more favorable as it provides you with a better risk to reward ratio. Again, this assumes that you are placing your stop loss above the high of the inside bar rather than the high of the mother bar.
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2 74an hour ago
As with most of the price action patterns that I trade, I target a 2:1 reward to risk ratio when trading the shooting star candlestick pattern. In other words, if I’m risking 50 pips, I place my take profit 100 pips below my entry.
Note: Depending on how you trade price action patterns, if you don’t use the qualifying filters that I mentioned above, you might want to experiment with a 3:1 reward to risk ratio when trading the shooting star.
If I were trading it without my filters today, I would consider a 3:1 reward to risk ratio when entering on the open of
the next candle (standard entry #1) or when using the 50% entry .
You can also use your reward to risk ratio as a filter. For instance, if you calculate that you cannot hit your full 2:1
take profit before price moves down into an area that you believe could possibly be a strong support zone, you may want to skip the trade or only take the trade if you can get the 50% entry.
One of the nice things about the shooting star candlestick pattern is that it often provides great entries (fewer pips at risk), which in turn makes it more likely that even a short-lived reversal will hit your full take profit.
In my experience, I’ve found that I can target a full 2:1 take profit with a qualified shooting star setup and the market will hit my full take profit consistently enough to be profitable over time.
if you want to learn how to trade the market using my price action trading strategies,
i highly recommend purchase my ebook (the candlestick trading bible). if you are interested,check it out in my bio, or send me a private message.