Inverted Hammer
Updated
What Is the Inverted Hammer Candlestick?
The Inverted Hammer candlestick formation occurs mainly at the bottom of downtrends and can act as a warning of a potential bullish reversal pattern.
What happens on the next candle after the Inverted Hammer pattern is what gives traders an idea as to whether or not prices will go higher or lower.
What Does the Inverted Hammer Look Like?
The Inverted Hammer formation is created when the open, low, and close are roughly the same price. Also, there is a long upper shadow which should be at least twice the length of the real body.
What Does the Inverted Hammer Mean?
On this chart of CRDT/USD you make see that there is a double confirmation of price reversing.
To some traders, this confirmation candle, plus the fact that the downward trendline resistance was broken, gave them a potential signal to go long.
It is important to note that the Inverted pattern is a warning of potential price change, not a signal, by itself, to buy.
Follow the chart and always remember to follow your trading strategy.
The Inverted Hammer candlestick formation occurs mainly at the bottom of downtrends and can act as a warning of a potential bullish reversal pattern.
What happens on the next candle after the Inverted Hammer pattern is what gives traders an idea as to whether or not prices will go higher or lower.
What Does the Inverted Hammer Look Like?
The Inverted Hammer formation is created when the open, low, and close are roughly the same price. Also, there is a long upper shadow which should be at least twice the length of the real body.
What Does the Inverted Hammer Mean?
On this chart of CRDT/USD you make see that there is a double confirmation of price reversing.
To some traders, this confirmation candle, plus the fact that the downward trendline resistance was broken, gave them a potential signal to go long.
It is important to note that the Inverted pattern is a warning of potential price change, not a signal, by itself, to buy.
Follow the chart and always remember to follow your trading strategy.
Note
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