Hammer Candlestick Setup - How to Analyze Hammer Candle Pattern

Hammer Bullish Candlesticks Pattern - Reversal Candlesticks Chart Setups

Reversal candlesticks patterns occur after an extended prior trend. Hence, for a candles pattern to qualify as a reversal candlesticks pattern there must be a prior trend.

The reversal candlesticks patterns are:

1. Hammer Candles Pattern & Hanging Man Candle Pattern
2. Inverted Hammer Candles Pattern & Shooting Star Candle Pattern
3. Piercing Line Candlestick Pattern and Dark Cloud Cover Candlestick Pattern
4. Morning Star Candle & Evening Star Candles
5. Engulfing Candles Patterns

Hammer Candlesticks Pattern and Hanging Man Candle Pattern Candles

Hammer Candles Pattern & Hanging Man Candle Pattern candlesticks look alike but hammer candles pattern is bullish reversal candlesticks pattern and hanging man is a bearish reversal candle pattern.

Hammer Candlesticks Pattern and Hanging Man Candle Pattern Candles

Hammer Candles Patterns

Hammer Candle Sticks Pattern is a potentially bullish candlestick setup which forms during a downtrend. It's named so because the market is hammering out a market bottom.

A hammer candle setup has:

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

Hammer Candles

Technical Analysis of Hammer Candle Pattern

The buy signal is confirmed when a candle closes above the opening price of the candle on the left side of the hammer candlesticks pattern.

Stop loss orders should be set a few pips just below the low of the hammer candle setup.