What is a Hammer Candlestick in Stocks?
What Does Hammer Candlestick Mean? Hammer Candle Definition
Hammer stocks candlestick pattern is a potentially bullish candle pattern which forms during a stocks downwards trend. It is named so because the stocks market is hammering out a market bottoms.
A hammer candle pattern has:
- A small body
- The body is at the top
- The lower shadow is 2 or 3 times length of real body.
- Has no upper shadow or very small upper shadow if present.
- The color of the body isn't important
What is a Hammer Candlestick in Stocks? - Hammer Candlestick Stocks Candle Pattern
Technical Analysis of Hammer Candlesticks Pattern
The buy signal is confirmed when a candlestick closes above the opening stocks price of the candle on the left side of the hammer candle pattern.
Stop orders should be placed a few pips just below the low of the hammer candle-stick.
