What Is Inverted Hammer Candle , How To Trade In Trading
A Hammer candlestick is a bullish reversal pattern that typically appears at the bottom of a downtrend.
It signals a potential trend reversal to the upside. Here are the key characteristics of a Hammer candlestick
Characteristics of a Hammer Candlestick:
Color Can Vary – While both green (bullish) and red (bearish) Hammers exist, a green Hammer is considered a stronger bullish signal.
Small Body – The real body (difference between open and close price) is small and located near the top of the candlestick.
Long Lower Shadow – The lower wick (shadow) is at least twice the size of the real body.
Little or No Upper Shadow – There is either no upper wick or a very small one.
Hammer vs. Hanging Man:
- If a Hammer appears at the bottom of a downtrend, it’s bullish.
- If the same pattern appears at the top of an uptrend, it’s called a Hanging Man and could indicate a bearish reversal.
Inverted Hammer vs. Shooting Star:
- If this pattern appears at the bottom of a downtrend, it’s an Inverted Hammer (bullish signal).
- If the same pattern appears at the top of an uptrend, it’s called a Shooting Star, which is a bearish reversal signal.
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