Hammer

The hammer is a bullish reversal candlestick pattern that occurs at the bottom of a downtrend. It is characterized by a small body and a long lower shadow. The long lower shadow indicates that there was a lot of selling pressure during the day, but the buyers were able to push the price back up to the opening price.

The hammer is considered to be a reliable signal of a trend reversal, but it should be used in conjunction with other technical indicators to confirm the pattern.

Here are some tips for trading the hammer candlestick pattern:

• Look for the pattern to form after a strong downtrend.
• Wait for the price to close above the open of the hammer before entering a long position.

The hammer is a useful tool for traders who are looking to buy the market, but it is important to remember that no single pattern is 100% reliable, and traders should always use caution when trading.