Inverted Hammer Candlestick, Hammer Candlestick Pattern
What is the Inverted Hammer Candlestick Pattern?
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| What is the Inverted Hammer Candlestick Pattern? |
What is the Inverted Hammer Candlestick Pattern?
The inverted hammer candlestick is one of the chart patterns that can help traders identify price trends from stocks to crypto assets. What is an inverted hammer candlestick pattern? Check out the meaning, examples, and how to use the inverted hammer pattern in the world of trading through the following article!
Inverted Hammer Candle Meaning
What is an inverted hammer candlestick? Basically, an inverted hammer candlestick is a candlestick pattern that indicates a potential price reversal from down to up for an asset. This pattern is shaped like an inverted hammer that has a long upper wick, a short lower wick, and a small candle body at the bottom of the wick.
Anzel Killian from IG Markets said that the inverted hammer candlestick is a pattern that forms when buyers put pressure on the market and begin to gain confidence in the asset. This activity indicates that there will be a bullish trend that will push asset prices up
Quoted from the Tradingview page, the inverted hammer pattern has similarities to the shooting star pattern. The shooting star pattern is often referred to as the bearish version of the inverted hammer candlestick.
Reporting from the Commodity page, the difference between the two patterns is in terms of their placement in the graph. The shooting star pattern is generally found at the top of an uptrend, while an inverted hammer candlestick with a bullish signal is usually found at the bottom of a downtrend.
Example of Inverted Hammer Candlestick Pattern
You can see an example of an inverted hammer candlestick pattern below.
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A green candle indicates a strong bullish pattern while a red candle indicates a relatively weak bullish pattern.
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Meanwhile, you can see the inverted hammer candlestick pattern in the overall price chart below.
As previously explained, the inverted hammer pattern appears at the bottom of a declining price trend and indicates a price reversal to bullish.
How to Use the Inverted Hammer Pattern in Trading
Quoted from the European Business Review page, the majority of traders interpret the bullish inverted hammer pattern as an indicator to buy assets because the price is predicted to rise.
However, Anzel Killian argues that the inverted hammer candlestick pattern should not be used alone in trading analysis. Traders should confirm signals with other technical indicators and consult a trading plan with experts in advance.
Difference between Candle Hammer and Inverted Hammer
The difference between the inverted hammer candlestick and the hammer candlestick is in terms of its shape.
As the name suggests, the Inverted hammer is shaped like an inverted hammer and has a short lower wick, a small candle body at the bottom of the wick, and a long upper wick.
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Meanwhile, Scott Melker from Cointelegraph explained that the hammer candlestick pattern is characterized by a long wick at the bottom and a short candle body at the top.
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Both patterns appear at the bottom of a downtrend and become a signal of a bullish trend.
If the pattern shooting star called a pattern inverted hammer candlestick version bearish pattern hanging man known as version bearish of the candlestick hammer. This pattern often appears at the top of an uptrend and indicates a possible price reversal from bullish to bearish.
Here is a shooting star pattern ( inverted hammer candlestick bearish )
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While this is a hanging man pattern ( bearish hammer candlestick )
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Thus a discussion of what an inverted hammer candlestick is and how to use the pattern in crypto trading.
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Inverted Hammer Candlestick, Hammer Candlestick Pattern
What is the Inverted Hammer Candlestick Pattern?
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