Get started

Chartpattren

A THREAD :BASICS OF HAMMER CANDLESTICK FORMATION (PATTERN). What Is a Hammer Candlestick? A hammer is a price pattern in candlestick charting that occurs when a security trades significantly lower than its opening, but rallies within the period to close near the opening price. This pattern forms a hammer-shaped candlestick, in which the lower shadow is at least twice the size of the real body. The body of the candlestick represents the difference between the opening and closing prices, while the shadow shows the high and low prices for the period. KEY TAKEWAYS:- Hammer candlesticks typically occur after a price decline. They have a small real body and a long lower shadow. The hammer candlestick occurs when sellers enter the market during a price decline. By the time of market close, buyers absorb selling pressure and push the market price near the opening price. The close can be above or below the opening price, although the close should be near the open for the real body of the candlestick to remain small. The lower shadow should be at least two times the height of the real body. Hammer candlesticks indicate a potential price reversal to the upside. The price must start moving up following the hammer; this is called confirmation. Understanding Hammer Candlesticks A hammer occurs after the price of a security has been declining, suggesting that the market is attempting to determine a bottom. Hammers signal a potential capitulation by sellers to form a bottom, accompanied by a price rise to indicate a potential reversal in price direction. This happens all during a single period, where the price falls after the opening but regroups to close near the opening price. Hammer should look similar to a “T.” This indicates the potential for a hammer candle. A hammer candlestick does not indicate a price reversal to the upside until it is confirmed. Confirmation occurs if the candle following the hammer closes above the closing price of the hammer. Ideally, this confirmation candle shows strong buying. Candlestick traders will typically look to enter long positions or exit short positions during or after the confirmation candle. For those taking new long positions, a stop loss can be placed below the low of the hammer’s shadow. Hammers aren’t usually used in isolation, even with confirmation. Traders typically utilize price or trend analysis, or technical indicators to further confirm candlestick patterns. Limitations of Using Hammer Candlesticks :- There is no assurance that the price will continue to move to the upside following the confirmation candle. A long-shadowed hammer and a strong confirmation candle may push the price quite high within two periods. This may not be an ideal spot to buy, as the stop loss may be a great distance away from the entry point, exposing the trader to risk that doesn’t justify the potential reward. Hammers also don’t provide a price target, so figuring what the reward potential for a hammer trade is can be difficult. Exits need to be based on other types of candlestick patterns or analysis. Psychology of the Hammer :- As we have seen, an actionable hammer pattern generally emerges in the context of a downtrend, or when the chart is showing a sequence of lower highs and lower lows. The appearance of the hammer suggests that more bullish investors are taking positions in the stock and that a reversal in the downward price movement may be imminent. The long lower shadow on the hammer candlestick indicates an effort to continue the price’s downward trajectory, but the higher close represented by the real body indicates that the sellers were ultimately unsuccessful in holding the price at its intraday low. The price’s ascent from its session low to a higher close suggests that a more bullish outlook won the day, setting the stage for a potential reversal to the upside. Hammer Candlestick Pattern:-📈 How should you trade with this pattern to take entry at lowest levels? 1.⛏The hammer candlestick is found at the bottom of a downtrend and signals a potential ( bullish ) reversal in the market. ⛏The hammer candle has a small body, little to no upper wick, and a long lower wick - resembling a ‘hammer’. 2. 🔨Hammer candle can be of any colour – It can be either of Green or Red colour. 🔨The lower shadow should be at least two times the height of the real body. 3. Psychology; This candle pattern indicates that the price dropped to new lows, but subsequent buying pressure forced the price to close higher, hinting at a potential reversal. The extended lower wick is indicative of the rejection of lower prices. 4. Reversal signal :– Entry for Bulls: It indicates the rejection of lower prices. When found in a downtrend it could signal the end of selling pressure and begin to trade sideways or reverse, after confirmation such pattern can give the best entey to play reversal. 5. Exit signal:- For Bears:- Traders that have an existing sell position, can view the hammer candle as an indication for reversal and they can take exit to existing sell position. 6. Confirmation is important : Entry in any trade should be taken only after the confirmation. Fomo of entering into a trade without any confirmation can trap you in a wrong trade. 7. Stoploss: Once entered into any trade after the confirmation, stoploss can be placed below the low of hammer candle. Traders, if you liked this thread , write in the comments. I will be glad.
NSE:ULTRACEMCO
by Jha_Nidhi
USDJPY > What to Expect Next, and Major Levels!!Analysis of #USDJPY Hi traders, today we will have a look at #USDJPY this idea is a request from one of our dearest follower as you can see, the market broke its trendline resistance with strong Momentum after the NFP news last Friday. right now the market might come back to test the structure support and the previous trendline resistance which now becomes a trendline support before deciding what it will do next. it's still early but as you can see we have higher lows and maybe the trend might be shifting to the upside in the near term, for me at the moment the market rallied almost from 128.00 to 132.00 that is 400 pips what I can do is wait for the market to come and retest the structure support level and maybe look at the lowest time frame for a reversal pattern with confirmation to enter a buy entry with an excellent reward to risk targeting the next level of support I hope you guys found this helpful, if you are new here click on follow, to get these ideas delivered straight to your email inbox, I will see you guys at the next one Thanks for your continued support!
by TheTradersAvenue
23
ADAUSDT LongTime Frame: 4H Symbol: ADAUSDT Entry: 0.3963 TP: 0.4099 SL: 0.3836 Bias: Long The development example of cost across all matches is going through a period of bullish assault. As a result of impending despondency as is anticipated by IMF and World bank, the worldwide monetary emergency is approaching around which will have direct effect in many business sectors including stock, monetary standards ,rough and other significant verticals. Our projection here depends on late cost motions and long haul indiscreet open doors.
Long
by NationCryptoSignals
ADAUSDT LongTime Frame: 4H Symbol: ADAUSDT Entry: 0.4071 TP: 0.4219 SL: 0.3963 Bias: Long Giving constant or future estimates for monetary markets is troublesome. It is vital to take note of that monetary business sectors are exceptionally powerful and dependent upon many variables that can influence their developments. Therefore, it is absurd to anticipate their future presentation with conviction precisely. We have given our all to extend likely heading on the graph.
Long
by NationCryptoSignals
USDCHF 4 Hours Chart ProjectionGood Day You All Happy New Trading Week: I am sharing my projection on USDCHF, after performing my top down analysis, i observed on the weekly timeframe that, price is in a CORRECTIVE PHASE and when the correction is completed we shall resume to the IMPULSIVE PHASE. The overall trend is heading to the Downside. We will be adding this pair to our watchlist for this week market projection....... Thank you for reading through the description Optimal Forex Academy Loves You All
Short
by opizzlefx
ADAUSDT ShortTime Frame: 4H Symbol: ADAUSDT Entry: 0.3506 TP: 0.3350 SL: 0.3615 Bias: Short As we see the crypto matches are pretty much negative and the inclination for up cost drive is disheartening .Our directional predisposition is overwhelmed by the new cost history and its various features of examples. The momentary energy driven open doors have the main concern in our examination. In any case, we additionally have put significance to dynamic help and opposition .
Short
by NationCryptoSignals
NZDJPY > Bullish Wedge Pattern at Entry Point!!Analysis of #NZDJPY Hi traders, today we will have a look at #NZDJPY looking at the NZDJPY chart you can see we have a wedge pattern after strong momentum to the upside as you can see the pattern completed at the Fibonacci 618 golden level which is also a key market level of 83.00 If the market comes and tests Fibonacci 618 again I will drop to the lower time frame and look for confirmation we are turning polish before entering a boy trade with a good reward to risk I hope you guys found this helpful, if you are new here click on follow, to get these ideas delivered straight to your email inbox, I will see you guys at the next one Thanks for your continued support!
by TheTradersAvenue
21
AUDUSD > Perfect Bullish Setup, Hopefully I Get an Entry!!Analysis of #AUDUSD Hi traders, today we will have a look at #AUDUSD look at this beautiful AUDUSD bullish setup that I have for you here we have: >> Trendline support >> Daily structure support level >> A strong key market level of 0.6900 >> Fib 0.61 retracement all lining up at the same level which you will make a very good entry-level with a very good reward-to-risk if the rules for entry are met and if the rules are met and we got an entry it will be a favorable entry and I hope you guys found this helpful, if you are new here click on follow, to get these ideas delivered straight to your email inbox, I will see you guys at the next one Thanks for your continued support!
by TheTradersAvenue
22
HAL- Hindustan Aeronautics - Weak structure NSE:HAL Looks very weak in all higher time frames. 1] At Monthly time frame it is a clear Bearish engulfing pattern. 2] At Weekly time frame it is having a head and shoulder pattern. 3] At Daily time frame it is clearly completed a head and shoulder pattern. The volumes are dried during the phase of H&S and started to pick heavily during down days. 4] Neckline is placed at 2300 a clear break down with heavy volume is a must for a Short entry or retest with low volume to neck line after a break down is another low risk entry opportunity. 5] Usually the targets in such pattern is the difference to neckline, in this case it 420 points or 1900. Interestingly the NSE:HAL chart has meaning full support only at 1900. Good Luck
NSE:HALShort
by Vasu_devan
EURUSD > Following up On My Previous Analysis!!Analysis of #EURUSD Hi traders, today we will have a look at #EURUSD Building up on my previous idea on the EURUSD, you can see the market broke its structure support level and 4h structure support zone after the wild surprise from the NFP report. Now the EURUSD is moving lower and it wanted to test a lower support level and strong support zone near the key market level of 1.07000, which will be a very good level to look for a buy entry. Since the trend is to the upside we are looking for a trend continuation pattern like a double bottom at trend line support near the structure support zone for example if the market keeps on falling and breaks support, then this idea is not valid anymore, and there is another spot to also look for a buy but I will post it in another post, stay tuned I hope you guys found this helpful, if you are new here click on follow, to get these ideas delivered straight to your email inbox, I will see you guys at the next one Thanks for your continued support!
by TheTradersAvenue
17