How to Read Hammer Candles Pattern
Hammer candlestick pattern is a potentially bullish candle pattern which forms during a downwards indices trend. It is named so because the stock indices trading market is hammering out a market bottom.
A hammer candlestick pattern has:
- A small body
- The body is at the top
- The lower shadow is two or three times the 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 Read Hammer Candlesticks Pattern?
Technical Analysis of Hammer Candles 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 candle pattern.
Stop-loss orders should be set a few pips just below the low of the hammer candlestick once a trade is opened using this candlesticks pattern formation.
