๐งจ Hammer Candle: A Signal of Trend Reversal ๐จ
The hammer candle is one of the most prominent reversal candles in technical analysis ๐, and it often appears at the end of downtrends ๐, indicating the potential for the market to shift from bearish to bullish.
๐โจ This candle is characterized by a small body, a very long lower wick, and a virtually nonexistent upper wick, typically appearing at bottoms after a strong decline.
When a hammer candle appears, it means that despite sellers' attempts to push the price down ๐, buyers enter strongly to lift the price before the close ๐ช๐ฅ. This serves as an initial signal of a potential trend reversal.
๐ However, traders should not rely on the hammer candle alone; they should wait for a bullish candle to follow as confirmation ๐, or ensure that the price is at a strong support area ๐ก๏ธ, along with using additional indicators like RSI or MACD ๐๐.
In conclusion, the hammer candle serves as a warning to speculators that the market may enter a reversal phase ๐, but it is essential to look for additional confirmations before making any trading decisions.
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