Analyze Hammer Candles Pattern
Hammer candlestick pattern is a potentially bullish candlestick pattern which forms during a downward indices trend. It is named so because the stock indices market is hammering out a market bottoms.
A hammer candlestick pattern has:
- A small body
- The body is at the top
- The lower shadow is two or three times length of the real body.
- Has no upper shadow or very small upper shadow if present.
- The color of the body is not important
How to Analyze Hammer Candles Pattern?
Technical Analysis of Hammer Candlesticks Pattern
The bullish reversal buy stock indices signal is confirmed when a candle closes above the opening stock indices price of the candle on the left side of the hammer trading candlestick pattern.
Stop Loss orders should be placed a few pips just below the low of the hammer candlestick once a trade is opened using this candles pattern formation.
