Types of Hammer Candle Pattern - Hammer Bullish Trading Candle Pattern - Reversal Candle Patterns

Hammer Bullish Candle Patterns - Reversal Candle Patterns

Reversal candlestick patterns occur after an extended prior trend. Therefore, for a candle pattern to qualify as a reversal candlestick pattern there must be a prior trend.

These reversal candlestick patterns are:

1. Hammer Candles Pattern & Hanging Man Candle Pattern
2. Inverted Hammer Candles Pattern & Shooting Star Candle Pattern
3. Piercing Line Candlestick Pattern & Dark Cloud Cover Candle Pattern
4. Morning Star Candles & Evening Star Candles
5. Engulfing Candles Patterns

Hammer Candlesticks Pattern & Hanging Man Candlestick Pattern Candles

Hammer Candlesticks Pattern & Hanging Man Candle Pattern look alike but hammer is bullish reversal candlestick pattern and hanging man is a bearish reversal candlestick pattern.

Hammer Candlesticks Pattern & Hanging Man Candle Pattern Candles

Hammer Candles Patterns

Hammer is a potentially bullish pattern which forms during a forex downtrend. It is named so because the market is hammering out a market bottoms.

A hammer has:

• A small body
• The body is at the top
• The lower shadow is 2 or 3 times length of real body.
• Has no upper shadow or very small upper shadow if present.
• The color of the body is not important

Hammer Candlesticks

Technical Analysis of Hammer Candles Patterns

The buy trading signal is confirmed when a candle closes above the opening price of the candle on the left side of the hammer candlesticks pattern.

Stop orders should be set few pips just below the low of the hammer candle.

Inverted Hammer Bullish Candle Patterns - Reversal Candle Patterns

Inverted Hammer Candles Pattern & Shooting Star Candle Pattern look alike. These have a long upper shadow and a short body at the bottom. Their color does not matter. What matters is the point where they appear whether at the top of a market trend (star) or the bottom of a market trend (hammer).

Difference is that inverted hammer is a bullish reversal candlestick pattern while shooting star is a bearish reversal candlestick pattern.

Upward Trend Reversal - Shooting Star Candlesticks

Downward Trend Reversal - Inverted Hammer Candlesticks

Inverted Hammer Candles Pattern & Shooting Star Candle Pattern Candles Patterns

Inverted Hammer FX Trading Candle

This is a bullish reversal candlestick pattern. It occurs at the bottoms of a Forex trend.

Inverted hammer occurs at the bottom of a downtrend & indicates the possibility of reversal of the downward Forex trend.

Inverted Hammer FX Candle

Analysis of Inverted Hammer FX Candlestick

A buy is completed when a candlestick closes above the neckline, this is the opening of the candlestick on the left side of this pattern. The neckline in this case is a resistance zone.

Stop orders for the buy trades should be set few pips below the lowest price on the recent low.

An inverted hammer is named so because it indicates that the market is hammering out a bottom.