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How Do I Read Hammer Candles?

Hammer candle pattern is a potentially bullish candlestick pattern formation which forms during a downwards trend. It's named and called so because the market is hammering a market bottom.

A hammer candle pattern has:

  • A small body
  • The body is at the top
  • 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 isn't important

How Do I Read Hammer Candlesticks Setup?

How Can I Analyze Hammer Candle-sticks Pattern Bullish or Bearish?

Analysis of the Hammer Candlesticks Pattern

The bullish reversal buy trading signal is confirmed when a candle stick closes above the opening price of the candle onto the left side of the hammer candlestick pattern formation.

Stoploss orders should be placed a few pips just below the low of the hammer candle once a trade position is opened using this candlesticks set-up formation.

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