In the world of trading, understanding candlestick patterns can be a game-changer for traders who want to achieve big. One such pattern that traders most widely use in the Pocket Option trading platform is the Inverted Hammer Candlestick.
Inverted Hammer Candlestick
An Inverted hammer candlestick is a small body with a long shadow candlestick pattern. This pattern is typically a bullish reversal pattern that usually appears at the bottom of the downtrend. the appearance of this pattern signals that although the sellers were initially motivated to push the price down but later buyers were able to regain control and push the price back up.
Significance of Inverted hammer candlestick pattern
The appearance of an inverted hammer candlestick pattern khana pocket option chart is a strong signal for traders indicating a potential reversal from a bearish to a bullish trend. this pattern suggests that the selling pressure is diminishing and buyers are ready to take control potentially signalling an upward rise in the price.
How to identify and trade using an Inverted Hammer candlestick pattern
Step 1: Identify the pattern
The first and foremost step is to identify the hammer candlestick pattern as I said above this pattern usually appears at the bottom of the downtrend.
Step 2: Confirm the Trend
Once you have identified the inverted hammer candlestick pattern. You should never ever place the trade based on one single inverted hammer candlestick pattern. You should always look for a confirmation such as two or three bullish candles.
Step 3: Use support and resistance
You can even use support and resistance to confirm the trend’s strength. if the inverted hammer candlestick pattern appears near the support level it signals an upcoming bullish trend and you can use this opportunity to place a buy trade.
Is Inverted Hammer Bullish?
Yes, an inverted hammer is considered a bullish reversal pattern that is typically found at the bottom of the downtrend. This candlestick pattern consists of a small body at the bottom and a long upper shadow that is usually at least twice the size of the body with little to no shadow. the inverted hammer candlestick indicates that the buyers have attempted to push the price up but the sellers were strong enough to bring the price back down.
