How Do I Read Hammer Candles Pattern?

Hammer candlestick pattern is a potentially bullish candlestick pattern which forms during a gold downward trend. It is named so because the xauusd 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 2 or 3 times the length of real body.
• Has no upper shadow or very small upper shadow if present.
• The color of the body is not important

How Do You Interpret Hammer Candlestick Pattern Bullish or Bearish?

Technical Analysis of Hammer Candles Pattern

The bullish reversal buy signal is confirmed when a candle closes above the opening xauusd price of the candlestick on the left side of the hammer candle pattern.

Stop-loss orders should be placed a few pips just below the low of the hammer candle once a trade is opened using this candles pattern formation.