Lesson three: Hammer candle — Beginning of the upward reversal
The hammer candle is one of the most famous reversal candles and usually appears at the end of a downtrend, and is considered an early signal for a potential upcoming rise.
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✅ Hammer candle shape:
Small body (green or red).
Very long lower shadow (2 to 3 times the body length).
Short or nonexistent upper shadow.
(We mentioned what the shadow and body of the candle are in the last lesson)
It often appears after a series of bearish candles.
📌 Mental image: It resembles a real hammer, with a small head and a long handle.
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📈 What does a hammer candle mean?
The price was in a downtrend.
Sellers pushed the price down, but in the same session, buyers returned strongly and closed the price near the opening.
This movement means that buyers have begun to take control, and the decline may have ended.
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❗Does every hammer mean a confirmed rise?
No. The presence of a hammer candle alone is not enough, rather:
It should appear after a clear downtrend.
It is preferable that it is followed by a green candle that confirms the rise (Confirmation candle).
Additional support from indicators like RSI or strong support areas = stronger signal.
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Apply this model to $BTC and you will be amazed by the result"
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