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Candlestick Charts : An introduction to using candlestick charts by Clive Lambert

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3. Single Reversal Patterns

An in depth look at the Hammer to see why this is a reversal signal, and such a strong one!

Hammer

The first pattern we’re going to look at is the Hammer. This is a rare treat in candlestick analysis: a pattern that looks like its name!

A Hammer looks like a hammer, with a small fat head and a long handle.

Rules

Construction

Let’s expand on the above, just to make sure everything’s clear. Think about our Doji: this was the result of an open and close at similar levels – an even balance between bulls and bears. The Hammer has a small real body, so with this pattern we have the same thing – a pretty ...

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