What is the Hammer Candlestick Pattern?

A Hammer is a single-candle pattern that usually appears after a price decline. It has a:

• A small real body near the upper part of the candle, and
• Long lower shadow, generally at least twice the size of the body. 

Additionally, the upper shadow is usually small or absent. The hammer candlestick pattern indicates that sellers pushed the price lower during the session, but buyers brought the price back toward the opening or closing level.

How to Execute a Hammer Pattern Trading Strategy?

A hammer is generally examined as a potential “bullish reversal signal”, but confirmation is important. Let’s check out the various factors usually examined by traders to gain confirmation:

Note: A hammer candlestick pattern should not be interpreted in isolation. The same candle can have different implications depending on the broader trend, support/resistance levels, volume, and subsequent price movement.

Analyse Hammer Patterns With Trade246

A Hammer is studied along with factors such as support, volume, and subsequent candles. Trade246 gives you advanced TradingView charts and professional drawing tools to examine these factors on price charts.

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