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The colour of the body can vary, but green hammers indicate a stronger bull market than red hammers. The hammer candlestick pattern is formed of a short body with a long lower wick, and is found at the bottom of a downward trend.Ī hammer shows that although there were selling pressures during the day, ultimately a strong buying pressure drove the price back up. They are an indicator for traders to consider opening a long position to profit from any upward trajectory. Six bullish candlestick patternsīullish patterns may form after a market downtrend, and signal a reversal of price movement. You can learn more about candlesticks and technical analysis with IG Academy’s online courses. When using any candlestick pattern, it is important to remember that although they are great for quickly predicting trends, they should be used alongside other forms of technical analysis to confirm the overall trend. You can develop your skills in a risk-free environment by opening an IG demo account, or if you feel confident enough to start trading, you can open a live account today. The best way to learn to read candlestick patterns is to practise entering and exiting trades from the signals they give. There are a great many candlestick patterns that indicate an opportunity within a market – some provide insight into the balance between buying and selling pressures, while others identify continuation patterns or market indecision.īefore you start trading, it’s important to familiarise yourself with the basics of candlestick patterns and how they can inform your decisions. Over time, individual candlesticks form patterns that traders can use to recognise major support and resistance levels. The colour, which reveals the direction of market movement – a green (or white) body indicates a price increase, while a red (or black) body shows a price decrease.The wick, or shadow, that indicates the intra-day high and low.The body, which represents the open-to-close range.This article focuses on a daily chart, wherein each candlestick details a single day’s trading. Candlestick charts are one of the most popular components of technical analysis, enabling traders to interpret price information quickly and from just a few price bars. A candlestick is a way of displaying information about an asset’s price movement.

Candlestick patterns