Bearish Hammer Pattern
A Bearish Hammer (Inverted Hammer) is a candlestick pattern that indicates potential trend reversal from a bullish to a bearish direction. It appears at the top of an uptrend and suggests that selling pressure is starting to take over from the bulls.
Characteristics of the Bearish Hammer Pattern:
- Shape: The Bearish Hammer has a small real body (can be red or green) at the lower end of the trading range, with a long upper shadow.
- Location: It appears after a sustained uptrend.
- Indication: It indicates that although buyers initially pushed the price higher, sellers stepped in and drove it back down, signaling weakness in the upward trend.
Identifying the Bearish Hammer Pattern
To analyze the Bearish Hammer pattern, follow these steps:
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Load the Chart for the Asset:
- Open the platform.
- Load the chart for the specific asset you wish to analyze.
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Set the Timeframe:
- Choose a suitable timeframe that matches your analysis. Higher timeframes (like daily or weekly) tend to provide more reliable candlestick patterns.
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Select Candlestick Chart:
- Ensure the chart type is set to “Candlestick” to accurately visualize the patterns.
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Use the Pattern Recognition Tool:
- Click on the FX Study section within the platform.
- Navigate to the Candlestick Pattern menu.
- Select the Bearish Hammer Pattern (or Inverted Hammer) from the available list of candlestick patterns.
- The tool will automatically highlight all occurrences of the Bearish Hammer on your chart, making it easier to identify potential bearish reversals.
