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What is Inverted Hammer Candlestick Pattern – How to trade

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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The information provided on this website is for educational and informational purposes only and should not be considered financial, investment, or trading advice. Trading in financial markets involves risk, and you should only invest money that you can afford to lose.

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