How to use hammer candlesticks in trading?

As such, to use hammer candlesticks in trading, you need to consider their position in relation to previous and next candles. The reversal pattern will either be discarded or confirmed depending on the context. Let’s take a look at each type of hammer. Every candlestick pattern has its pros and cons.

What are hammer candles & how do they work?

The bullish hammer candles include the hammer and inverted hammer, which appear after a downtrend. The bearish variations of hammer candles include the hanging man and the shooting star, which occur after an uptrend. The hammer candlestick is a pattern that works well with various financial markets.

What is a green Hammer candle?

A green hammer candle, however, is slightly more bullish compared to a red hammer candle. Hammer Candlestick in Uptrend : These are the once to trade. Hammer candlestick in uptrend generally occurs at the end of a retracement and it can be an important clue of a possible continuation of the original uptrend.

What are the bearish variations of Hammer candles?

The bearish variations of hammer candles include the hanging man and the shooting star, which occur after an uptrend. The hammer candlestick is a pattern that works well with various financial markets. It is one of the most popular candlestick patterns traders use to gauge the probability of outcomes when looking at price movement.