Technician

Watch This Candle: #AUDJPY Hammer Weekly | #FOREX

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FX:AUDJPY   Australian Dollar / Japanese Yen
Introducing another posts type named " Watch This Candle", I will try to spot and explain the main important candlesticks patterns. I wish you like it. If you do please comment and agree so i continue...
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Candlestick Pattern: Hammer
Prior Trend: Down
Implications/Use: Bullish reversal, Bullish correction, good for scalping

Introduction
One of the most powerful tools in gauging shifts in market balances, the hammer candlestick pattern is one of the patterns I personally find extremely useful in the process of determining trend reversals.

Definition
There are plenty of candlestick patterns; however the hammer is of the most illustrative.
Hammer candles form when a security moves sharply lower after the open, but rebounds to close significantly above the low of the session.

The shape

The Hammer has a long lower shadow with a small body, the lower shadow should at least be double the size of the body, and the body can be green(up) or red(down), however through my experience I find the ones with green body more reliable.

The Hammer should be preceded by a clear downtrend or at least several down days.
Note: breakouts below the low of the hammer usually lead to further bearish movement, and confirms bearish continuation.
$$ It's strongly recommended to always use candlestick patterns in conjunction with other technical tools to increase the chances of success. For example, a hammer near a support level or the 50-days Simple Moving Average .
Note: breakouts below the low of the hammer usually lead to further bearish movement, and confirms bearish continuation
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