Is Hammer Candlestick Pattern Bullish or Bearish?

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

A hammer candlestick 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 is not important

What Happens in Commodity Trading after a Hammer Candlesticks Pattern?

Technical Analysis of Hammer Candles Pattern

The bullish reversal buy signal is confirmed when a candle closes above the opening commodity price of the candlestick on the left side of the 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.