Hammer candlestick pattern is a single candlestick pattern. In which body is shorter than the shadow or wick. Which can help in predicting market trend reversal. We will understand what are hammer candle stick pattern in this blog.
The hammer candlestick pattern is formed of a short body with a long lower wick, and is found at the bottom of a downward trend. A hammer shows that although there were selling pressures during the day, ultimately a strong buying pressure drove the price back up.
Another Bullish pattern is the inverted hammer. The only difference being that the upper shadow is long, while the lower shadow is short. It indicates a buying pressure, followed by a selling pressure that was not strong enough to place the market price down. The inverse hammer indicates that buyers can have control of the market soon.
The hanging man is the bearish hammer; it has the same shape as hammer but forms at the end of an uptrend. It indicates that there was a significant sell-off during the day, but that buyers were able to drive the price up again. The large sell-off is often seen as an indication that the bulls are losing control of the market.
The shooting star is the same shape as the inverted hammer, but is formed in an uptrend: it has a small lower body, and a long upper shadow. This will tell bullish trend has came to an end, now bulls will start taking over market.
Hope you have learned some more candlestick patterns from this blog. if you have any questions do write in comment. I would be glad to answer them. See you soon…