The Hammer pattern is one of the famous Japanese candlestick patterns, used in technical analysis to identify a potential reversal point towards an upward trend after a downward trend.
---
🔍 Characteristics of the Hammer Candle:
1. The body of the candle is small and located at the top of the trading range.
2. A long lower shadow (lower wick), usually at least twice the length of the body.
3. There is almost no upper shadow (or it is very short).
4. It usually appears at the end of a downward trend.
---
📈 What does the Hammer Candle mean?
It means that sellers were in control at the beginning of the session, but buyers managed to push the price up before the close.
This suggests that the market may be on its way to reversing upwards.
---
✅ Conditions to Confirm the Hammer Candle:
To be considered a strong bullish signal, it is preferable that:
It appears after a clear downward trend.
It is accompanied by high trading volume.
It is followed by a bullish candle (confirmation of the reversal).
---
⚠️ Important Note:
It is not advisable to rely on the Hammer pattern alone to make a buying decision. The signal should be confirmed using other tools such as:
Relative Strength Index (RSI)
Support/Resistance levels
Trading volume
Other technical patterns
