Online Stock Trading - Technical Analysis - Hammer Bullish Candlestick Reversal Pattern - Candlestick Training Video
Technical Analysis - Stock Market CandlesticksIn technical analysis the Hammer Pattern is a bullish candelstick reversal pattern. It is a single candlestick a body at the top and a shadow below it (the Hammer looks exactly the same as the Hanging Man - the difference is that the Hammer comes after a downward trend and represents a bullish reversal - the Hanging Man on the other hand comes after an upward trend and represents a bearish reversal pattern). The body of the Hammer can be either red or green but the green body is slightly more bullish.
The Hammer needs to be confirmed the next by a gap up and move upwards and trading above the hammer.
The lower shadow in the hammer candlestick needs to be at least twice the size of the body.
The level of confirmation you require will vary depending on how willing you are to accept risk - aggressive traders will enter the trade as soon as the price trades above the hammer high, more risk averse will wait for the closing price to be above the high of the body.
More details in this candlestick training video from yourtradingcoach.com on youtube.
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