{"id":19464,"date":"2022-05-12T16:20:00","date_gmt":"2022-05-12T16:20:00","guid":{"rendered":"https:\/\/zebpay.com\/au\/?p=19464"},"modified":"2022-11-10T11:09:28","modified_gmt":"2022-11-10T11:09:28","slug":"how-to-trade-hammer-candlestick-pattern","status":"publish","type":"post","link":"https:\/\/zebpay.com\/au\/blog\/how-to-trade-hammer-candlestick-pattern","title":{"rendered":"How to trade with Hammer Candlestick patterns?"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/zebpay.com\/au\/blog\/how-to-trade-hammer-candlestick-pattern\/#What_is_a_hammer_candlestick_pattern\" title=\"What is a hammer candlestick pattern?\">What is a hammer candlestick pattern?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/zebpay.com\/au\/blog\/how-to-trade-hammer-candlestick-pattern\/#What_does_the_hammer_candlestick_indicate\" title=\"What does the hammer candlestick indicate?\">What does the hammer candlestick indicate?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/zebpay.com\/au\/blog\/how-to-trade-hammer-candlestick-pattern\/#Understanding_hammer_candlestick\" title=\"Understanding hammer candlestick\">Understanding hammer candlestick<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/zebpay.com\/au\/blog\/how-to-trade-hammer-candlestick-pattern\/#Trading_Strategies_using_Hammer_Candlestick\" title=\"Trading Strategies using Hammer Candlestick\">Trading Strategies using Hammer Candlestick<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/zebpay.com\/au\/blog\/how-to-trade-hammer-candlestick-pattern\/#Support_and_resistance_strategy\" title=\"Support and resistance strategy\">Support and resistance strategy<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/zebpay.com\/au\/blog\/how-to-trade-hammer-candlestick-pattern\/#Intraday_trading_with_moving_averages\" title=\"Intraday trading with moving averages\">Intraday trading with moving averages<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/zebpay.com\/au\/blog\/how-to-trade-hammer-candlestick-pattern\/#Top-bottom_strategy\" title=\"Top-bottom strategy\">Top-bottom strategy<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/zebpay.com\/au\/blog\/how-to-trade-hammer-candlestick-pattern\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n\n<p>Traders devise their strategies in financial markets, including crypto markets, based on &nbsp; technical analysis of price trends. The analysis involves understanding price patterns, trends, and price actions using a set of indicators. One of the popular indicators used by traders is the hammer candlestick pattern. In this article, we will discuss how to trade the hammer candlestick pattern.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-a-hammer-candlestick-pattern\"><span class=\"ez-toc-section\" id=\"What_is_a_hammer_candlestick_pattern\"><\/span>What is a hammer candlestick pattern?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The hammer candlestick pattern predicts the trend reversal in the price pattern on the bullish side. It is a parameter that can work for a wide variety of financial assets, including stocks, forex, indices, and crypto assets.&nbsp;<\/p>\n\n\n\n<p>The traders can use it as a reliable indicator for trend reversals and successfully trade using hammer candlestick patterns.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_does_the_hammer_candlestick_indicate\"><\/span>What does the hammer candlestick indicate?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The hammer candlestick is a bullish reversal pattern, i.e., it predicts an increase in price after a decline. The shape of the candlestick is like a hammer with a stocky body and a tail\/wick downwards. The figures below will help you identify the hammer candlestick pattern.<\/p>\n\n\n<div class=\"wp-block-image is-style-default\">\n<figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/lh3.googleusercontent.com\/PTn-kHBbT2bTZ7toY6rnxT5AhwNpLuBOt5MmjqaTVwXxX4wrkHB3Ji_DtHKA6AiiTY5vzOi4hFbuwp8_5lsN9x2MUwFU6DvWMz4yUmbgwwNMXqpND6jZY2aY1RQ8VEU0SYbXYP-H5dIsftlT4g\" alt=\"\" width=\"340\" height=\"189\"\/><figcaption><strong>Bullish Hammer Candlestick<\/strong><\/figcaption><\/figure><\/div>\n\n<div class=\"wp-block-image is-style-default\">\n<figure class=\"aligncenter is-resized\"><img decoding=\"async\" src=\"https:\/\/lh5.googleusercontent.com\/KCOu1V432vnO9Nn1U2jz9RuqCi3oU-PXH-KSwC7XbKzlfz86HrqL5XJVJsmjcCqvv5sH8Coy_d6UQQXokgZK6RvUeZ3oYydnPRE-8pQjVIx6GW6JAzQtm1YeGww9gBrM0vV8nfmj7YB0XfPNFA\" alt=\"\" width=\"340\" height=\"194\"\/><figcaption><strong>Bearish Hammer candlestick<\/strong><\/figcaption><\/figure><\/div>\n\n\n<p>The opening price and the closing price are close in this formation, which shows more sellers initially pulling the price down, followed by buyers entering the market and pushing the price up before close.&nbsp;<\/p>\n\n\n\n<p>If the closing price is higher than the opening price, the hammer candlestick pattern is called a bullish hammer. If lower than the opening price, the hammer candlestick pattern is called a bearish hammer.&nbsp;<\/p>\n\n\n\n<p>In terms of representation, the body of a bullish hammer candlestick is green in colour, while the body of the bearish one is red. Irrespective of the body colour, the pattern indicates a bullish movement.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Understanding_hammer_candlestick\"><\/span>Understanding hammer candlestick<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Looking closely, the hammer candlestick pattern represents the level of demand and supply of the crypto asset. It can be observed by the way the formation of the candle takes place. A longer wick indicates that more sellers are present, and as a result, the price is being pulled down due to selling pressure. At a later stage, though, the price tends to rise, which means the buyers become active as the downside potential of the price is exhausted, and trend reversal takes place. This pushes the price again to the opening level or above it. Generally, the hammer candlestick appears after a decline in the price.<\/p>\n\n\n\n<p>Whenever a hammer candlestick forms, it indicates a trend reversal in price movement and market sentiment. This can be confirmed by observing price momentum following the formation of this pattern.<\/p>\n\n\n\n<p>Read About: <a href=\"https:\/\/zebpay.com\/au\/blog\/understand-crypto-trend-analysis-and-buying-patterns\/\" target=\"_blank\" rel=\"noreferrer noopener\">Understand Crypto Asset Buying Patterns and Trend Analysis<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Trading_Strategies_using_Hammer_Candlestick\"><\/span>Trading Strategies using Hammer Candlestick<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Traders can use the hammer candlestick to plan their entry or exit into the security.&nbsp; Mentioned below are some hammer candlestick pattern tips that traders can use.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Support_and_resistance_strategy\"><\/span>Support and resistance strategy<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Support and resistance are the price levels on the lower and higher sides, respectively. They are not broken easily, but once they are broken, there is a significant price movement. Generally, some news or event is required to break either support or resistance. Therefore, the trader can predict the price using price action and while trading, a hammer candlestick can be seen as a confirming indicator of a bullish trend.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter is-resized is-style-default\"><img decoding=\"async\" src=\"https:\/\/lh5.googleusercontent.com\/xBUt2c4Ak29XczSxqqnlDmZJntEhnYci0yW8ApOprHrjNu1nV6beeZeTqmWeTpq9B-Yv6LxqOksWibDR13P5bc5mmBGt24aFwcRcqc1DguWmtFrH_o6b-Uj7UL5cX4DW7AnA6EJvhyoMUVkh5g\" alt=\"How To Identify Hammer Candlestick\n\n\" width=\"506\" height=\"300\"\/><figcaption><strong>Support and resistance strategy<\/strong><\/figcaption><\/figure>\n\n\n\n<p class=\"has-text-align-center\">(Source: Bybit.com)<\/p>\n\n\n\n<p>In the given chart of ETH prices, both support and resistance can be seen around 2330. The price breaks this level with buying pressure and later falls back again to the same point, at which the traders will need a confirmation from the hammer candlestick to buy.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Intraday_trading_with_moving_averages\"><\/span>Intraday trading with moving averages<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In this strategy, a trader has to identify a bullish trend using exponential moving averages (EMA). Once the trend is identified, any bearish correction can be seen as a buying opportunity. The same can be confirmed by the appearance of a hammer candlestick followed by the bearish price movement.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Top-bottom_strategy\"><\/span>Top-bottom strategy<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In this strategy, the first step is identifying the bottom, i.e. a new low, that breaks all the short-term lows. On reaching the new low, an indecision candle will appear in the charts with sellers trying to pull the price down. If this is followed by the formation of the hammer candlestick, it indicates a bullish reversal. The trader can consider entering at this point to get the advantage of price rise with a stop loss below the wick with a buffer.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>We can see that the hammer candlestick pattern is a reliable indicator of trend reversals, and it complements other price action indicators like moving averages and trends. This can help the traders devise their strategies to a great extent. So don\u2019t wait; don your trader\u2019s hat and start trading in your favourite crypto assets by logging on to <a href=\"https:\/\/zebpay.com\/au\" target=\"_blank\" rel=\"noreferrer noopener\">ZebPay<\/a> Australia.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Traders devise their strategies in financial markets, including crypto markets, based on &nbsp; technical analysis of price trends. The analysis involves understanding price patterns, trends, and price actions using a set of indicators. One of the popular indicators used by traders is the hammer candlestick pattern. In this article, we will discuss how to trade [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":19465,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[14],"tags":[],"class_list":["post-19464","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto"],"acf":[],"_links":{"self":[{"href":"https:\/\/zebpay.com\/au\/wp-json\/wp\/v2\/posts\/19464","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zebpay.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zebpay.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zebpay.com\/au\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/zebpay.com\/au\/wp-json\/wp\/v2\/comments?post=19464"}],"version-history":[{"count":1,"href":"https:\/\/zebpay.com\/au\/wp-json\/wp\/v2\/posts\/19464\/revisions"}],"predecessor-version":[{"id":19466,"href":"https:\/\/zebpay.com\/au\/wp-json\/wp\/v2\/posts\/19464\/revisions\/19466"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zebpay.com\/au\/wp-json\/wp\/v2\/media\/19465"}],"wp:attachment":[{"href":"https:\/\/zebpay.com\/au\/wp-json\/wp\/v2\/media?parent=19464"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zebpay.com\/au\/wp-json\/wp\/v2\/categories?post=19464"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zebpay.com\/au\/wp-json\/wp\/v2\/tags?post=19464"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}