Hammer candle indicating potential reversal
A hammer is a type of bullish reversal candlestick pattern . The candle looks like a hammer, as it has a long lower wick and a short body at the top of the candlestick with little or no upper .Hammers occur after a price decline.
KEY TAKEAWAYS
1.Hammers have a small real body and a long lower shadow.
2.Hammers occur after a price decline.
3.The hammer candlestick shows sellers came into the market during the period but by the close the selling had been absorbed and buyers had pushed the price back to near the open.
4.The close can be above or below the open, although the close should be near the open in order for the real body to remain small.
5.The lower shadow should be at least two times the height of the real body.
Hammer candlesticks indicate a potential price reversal to the upside. The price must start moving up following the hammer; this is called confirmation.
Hammers signal a potential capitulation by sellers to form a bottom, accompanied by a price rise to indicate a potential reversal in price direction. This happens all during the one period, where the price falls after the open but then regroups to close near the open.
KEY TAKEAWAYS
1.Hammers have a small real body and a long lower shadow.
2.Hammers occur after a price decline.
3.The hammer candlestick shows sellers came into the market during the period but by the close the selling had been absorbed and buyers had pushed the price back to near the open.
4.The close can be above or below the open, although the close should be near the open in order for the real body to remain small.
5.The lower shadow should be at least two times the height of the real body.
Hammer candlesticks indicate a potential price reversal to the upside. The price must start moving up following the hammer; this is called confirmation.
Hammers signal a potential capitulation by sellers to form a bottom, accompanied by a price rise to indicate a potential reversal in price direction. This happens all during the one period, where the price falls after the open but then regroups to close near the open.
Trade closed: target reached