hammer is a type of reversal bullish reversal pattern, which consists of only one candle, found in the financial asset price graph. The candle looks like a hammer, because it has a long lower axis and a short body at the top of the chandelier with little or no upper axis. In order for a candle to be a valid hammer, most traders say the lower axis should be twice the size of the wax body part, and the wax body should be at the top of the trading range.
When you look at the form of a hammer in this downtrend this is a potential reversal sign in the market because the longer long axis represents the trading period at which the seller was initially in charge, but the buyer can reverse that control and push the price back to close close high for the day, thus a short body at the top of the candle.
After looking at the shape of this chart pattern in the market, most traders will wait for the next period to open higher than the previous period closing to ensure that the buyer is really in control.
Two additional things that the trader will be looking to place are more important on the lower long axis pattern and volume increase for the time period that makes up the hammer.
Video Hammer (candlestick pattern)
See also
- Hang man - Hammer found in up trend
Maps Hammer (candlestick pattern)
External links
- Video Examples and Candlestick Hammer Pattern Chart
- Pattern hammer on onlinetradingconcepts.com
- Bullish Hammer at candlesticker.com
- Definition of hammer at investopedia.com
- Hammers information at candlecharts.com
- Hammer at chartscorner.com
Source of the article : Wikipedia
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