🧠 What does a hammer candle mean?
It means that sellers were in control at first and managed to push the price down.
But at the end of the period, buyers came in strong and pushed the price up.
This indicates a potential reversal of the trend from down to up.
🧭 Conditions to consider a candle a "true hammer":
1. It must come after a downtrend.
2. Very long lower shadow (at least 2× the length of the body).
3. Very small or no upper shadow.
4. The body is in the upper half of the candle.
5. Preferably, the body is green (closing higher than opening), but red is acceptable as long as it is followed by confirming bullish candles.
📌 Important notes:
Previous trend must be down
Candle color preferably green
Lower shadow very long
Upper shadow small or nonexistent
Confirmation with a bullish candle afterwards (Bullish Confirmation)
📊 The difference between a hammer and an inverted hammer:
Candle Shape Previous trend Meaning
Hammer Long lower shadow Downward Potential rise
Inverted Hammer Long upper shadow Downward Possible rise but weaker
✅ When to enter a trade?
1. Appearance of a hammer candle after a downtrend.
2. Waiting for a confirming bullish candle.
3. Entering a buy after the confirmation candle closes.
4. Stop loss below the hammer's shadow.