What Is A Hammer Pattern?
A hammer is a price pattern in candlestick charting that occurs when a security trades significantly lower than its opening, but rallies within the period to close near the opening price.
This pattern forms a hammer-shaped candlestick, in which the lower shadow is at least twice the size of the real body.
The body of the candlestick represents the difference between the open and closing prices, while the shadow shows the high and low prices for the period.
This is a major reversal one candlestick pattern, especially on higher time frames.
FYI: The chart notes a bullish one candlestick pattern. Yes, they can be bearish reverses on top of trends (but they are called another name).
How To Trade:
Put entry above bullish hammer
Put stop loss below bullish hammer
Put 1st target- same distance of stop to entry...for 1:1 Risk and Reward..
You can spot those hammer on any time frames- higher time frames are more reliable to trade from or 1 hour and above.
A hammer is a price pattern in candlestick charting that occurs when a security trades significantly lower than its opening, but rallies within the period to close near the opening price.
This pattern forms a hammer-shaped candlestick, in which the lower shadow is at least twice the size of the real body.
The body of the candlestick represents the difference between the open and closing prices, while the shadow shows the high and low prices for the period.
This is a major reversal one candlestick pattern, especially on higher time frames.
FYI: The chart notes a bullish one candlestick pattern. Yes, they can be bearish reverses on top of trends (but they are called another name).
How To Trade:
Put entry above bullish hammer
Put stop loss below bullish hammer
Put 1st target- same distance of stop to entry...for 1:1 Risk and Reward..
You can spot those hammer on any time frames- higher time frames are more reliable to trade from or 1 hour and above.