Mainly the Hammer candlestick pattern indicates a possible trend reversal.

Hammer Candlestick Patterns:

A hammer is a bullish pattern that forms after a market downtrend and signals a reversal of price movement.

1- Small Real Body 2- Long Lower Shadow 3- Little to No Upper Shadow

 Hammer Candlestick Characteristics

1- Small Real Body: The real body must be small and preferably close to the opening price.

2- Long Lower Shadow: The lower shadow must be at least twice as long as the real body.

3- Little to No Upper Shadow: There should be little or no upper shadow.

The presence of the hammer suggests that sellers have lost control and buyers are moving in. It could be a sign of reversal.

The hammer's signal is strengthened, if the next candle is bullish and continues the upward movement.

Stop-Loss: To manage risk, you can place stop-loss orders below the low of the hammer candlestick.

Target: Determine a target level based on the price movement and your risk-to-reward ratio.

To trade Hammer candlestick patterns, it is important to keep many factors in mind. Be sure to backtest it.

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