Hammer Candlestick Pattern.(share market) - पूरी जानकारी

     Hammer Candlestick Pattern.(share market) - पूरी जानकारी

   Hammer Candlestick.

     How to Trade the Hammer Candlestick Pattern?

You can get all the information you require regarding the Hammer candlestick pattern right here.

·      The Hammer Candlestick Pattern: Explained.

·      How to Recognize the Hammer Candlestick Pattern.

·      The Hammer Candlestick Pattern's variations.

·      Trading the Hammer Candlestick Pattern: A Guide.

·      Trading Techniques for the Hammer Candlestick Pattern.

 

Ø Strategy 1: Retractions on Bare Charts.

Ø Strategy 2: Using Support Levels to Trade the Hammer.

Ø Strategy 3: Using Moving Averages to Trade the Hammer.

Ø Strategy 4: Using RSI Divergences to Trade the Hammer.

Ø Strategy 5: Using Fibonacci to Trade the Hammer.

Ø Strategy 6: Using Pivot Points to Trade the Hammer.

   The Hammer Candlestick Pattern: Explained.

A Japanese candlestick pattern is called Hammer.

The pattern of reversal is bullish.

It typically expresses rejection from reduced pricing and manifests itself following a price reduction.

This pattern is bullish because we anticipate a bull move following the appearance of a Hammer at the appropriate spot.

It's a reversal pattern since we want to see price decline before the Hammer arrives, which is also a common indicator of a trend's end.

Another mirrored variation of the Inverted Hammer Candlestick Pattern is the Hammer pattern.

How to Recognize the Hammer Candlestick Pattern.

One single candle creates the Hammer candlestick design.

The Hammer candlestick pattern can be recognized as follows:

1.         The body of the candle is small.

2.    The bottom wick needs to be larger than the body.

3.    Its wick should be small or absent from the top.

4.   The body's color has not any impact on anything.

          For Example...................

The Hammer Candlestick Pattern's variations.

On your charts, the Hammer candlestick pattern can look a little differently.

It doesn't matter what color the body is; it can be green or red, or bullish or bearish.

It also makes no difference if there is a wick (shade) at the top or not. As long as it's small everything should be ok.

        For Example ........................

Trading the Hammer Candlestick Pattern: A Guide.

You need more than just a candle with the same form on your charts to trade the Hammer candlestick pattern.

Actually, certain candlestick patterns—like the Hanging Man candle—have precisely the same shape.

Are you confused?

Let me explain.

A pattern is legitimate not just because of its shape but also because of where it appears.

This implies that a shape appearing in multiple places could signify different things.

When trading the Hammer, we anticipate a negative move in which the price first declines.

Following this negative move, the appearance of a Hammer indicates a potential upside reversal.

Looks at..................

It's easy: if the candle's high is broken, the Hammer pattern is traded.

That serves as your long-term conservative trigger.

Looks at....................

Now that things don't always go as planned when trading, you also want to secure yourself.

And we employ a stop loss for that.

There exist multiple varieties of stop loss strategies.

The most popular method is to set it using the other side of the pattern.

However, hold off before trading the Hammer just yet.

The Hammer candlestick pattern should ideally be traded in conjunction with other forms of technical analysis or indicators to maximize accuracy.

These are some trading tactics for the Hammer pattern.

 Trading Techniques for the Hammer Candlestick Pattern.

 Strategy 1: Retractions on Bare Charts.

The Hammer is a bullish reversal pattern that is useful to keep an eye out for during an upward trend in prices.

Simply wait for the pullback to begin, and then identify the Hammer's appearance.

That frequently signals the end of the pullback and the beginning of the new upward leg.

Example….............

Strategy 2: Using Support Levels to Trade the Hammer.

 Levels of support and resistance are excellent sources of price reversals.

Our intention is to trade the Hammer by utilizing support levels, as we are searching for upward movements.

How is it worked?

o  Charts should have support level drawings.

o     Await a drop in price that reaches the support level.

o    Verify if there is a Hammer there.

o   When the price hits the Hammer's peak, invest heavily.

o   Assume a move to the upside and set your stop loss and take profit levels.

Example…….......

Strategy 3: Using Moving Averages to Trade the Hammer.

For trading trends, moving averages are excellent trading indicators.

When prices are rising, the strategy here is to trade pullbacks to the moving average.

How is it worked?

o   Look for an upward trend where the price exceeds a moving average.

o   A price drop toward the moving average is what you should watch for.

o   Verify whether a Hammer shows up at the moving average.

o   When the price hits the Hammer's peak, invest heavily.

o   Determine your take-profit and stop-loss levels and anticipate one more upward leg.

Example………..

 Strategy 4: Using RSI Divergences to Trade the Hammer.

Compared to the other trading tactics, this is a little different.

The price must first be in a downtrend and making lower highs and lower lows in order for there to be a bullish RSI Divergence.

How is it worked?

o   Identify a downward trend.

o   After every leg to the downside, note the lowest points the price hits.

o   Analyze the price lows and the RSI indicator together.

o   You have identified a divergence when the price is making lower lows and the RSI is making higher lows.

o   You now have to wait for the appearance of a Hammer at a lower price low that corresponds to a higher RSI low.

o   Invest when the price reaches the Hammer's peak.

o   Assume a move to the upside and set your stop loss and take profit levels. 

Example……….......

Strategy 5: Using Fibonacci to Trade the Hammer.

 Using the Fibonacci retracement tool is a common method of trading the Hammer candlestick.

Fibonacci illustrates retracement levels, or points at which price tends to regularly reverse.

Different levels are more likely to work better with the Hammer pattern depending on the strength of the trend. More information about the various Fibonacci retracement levels may be found here.

How is it worked?

o   You desire an upward trend in the pricing.

o   Next, you await a decline, which will inevitably occur eventually.

o   Using your Fibonacci tool, sketch the levels of the motion from its low to its high.

o   You are waiting for the price to reach a Fibonacci level and create a hammer.

o   When the price hits the Hammer's peak, invest heavily.

o   Assume a move to the upside and set your stop loss and take profit levels.

Example………..

Strategy 6: Using Pivot Points to Trade the Hammer.

Pivot points are automatically determined levels of resistance and support based on mathematical calculations.

The Daily Pivot Points are the most commonly employed while day trading, though the Weekly and Monthly are also often utilized.

Here's how to use pivot points to trade the Hammer pattern:

o   Turn on your charts' Pivot Points indicator.

o   Examine which pivot points are less expensive; these will typically serve as a source of support.

o   While not necessary, it is ideal to see the price on an upward trend.

o   Await the price dropping to a Pivot Point level.

o   At that point, a Hammer pattern should show, indicating that the level is being rejected.

o   When the price hits the Hammer's peak, invest heavily.

o   Assume a move to the upside and set your stop loss and take profit levels.

Example…….. 

What Is The Hammer's Success Rate? 

The Hammer candlestick pattern has a 60% success rate, according to Thomas N. Bulkowski's Encyclopedia of Candlestick Charts.