Hammer Candlestick Pattern

Daily Forex Signals – Information is not investment advice

Many traders use Japanese candlestick charts to analyze the price of an asset. This type of chart depicts the price action over a certain period and helps a trader check the trend’s strength and predict an upcoming reversal through Japanese candlesticks’ analysis. Japanese candlesticks (parts of the Japanese candlestick chart) are very informative technical analysis instruments. They form continuation and reversal patterns, which traders follow.

Charting Basics – Bars vs. Candlesticks

Even a single candlestick can tell a lot about the price changes. This article will introduce you to one of the most famous single-candlestick patterns – a hammer candlestick pattern. To identify the Hammer candlestick pattern, a trader needs to open the trading platform and find it on the chart. candlestick trading

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What Is a Hammer Candlestick Pattern?
The Hammer candlestick is a pattern that appears at the end of a downtrend. It consists of a small real body and a long lower shadow. The shadow should be at least twice the size of the body. A small real body means a small range between the opening and closing prices. A long lower tale indicates that bears tried to pull the price to the fresh lows but failed to continue the downtrend. The pattern’s color can be either bullish or bearish, although the signal is more substantial if it’s bullish.

The picture below shows bullish and bearish examples of this pattern.

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Hammer Candlestick Pattern