Analyze Hammer Candlestick Pattern Bullish or Bearish

Hammer candle-stick pattern is a potentially bullish candle-stick pattern that forms during a commodity downward trend. It is named so because the commodities trading market is hammering out a market bottom.

A hammer candle-stick pattern has:

• A small body
• The body is at the top
• The lower shadow is 2 or 3 times the length of real body.
• Has no upper shadow or very small upper shadow if present.
• The color of the body isn't important

Commodity Trading Analyze Hammer Candlestick Pattern Bullish or Bearish

Technical Analysis of Hammer Candles Pattern

The bullish reversal buy trading signal is confirmed when a candle closes above the opening commodity price of the candle on the left of this hammer candle pattern.

Stop loss orders should be placed a few pips just below low of the hammer candle stick once a trade is opened using this candlesticks pattern formation.