bearish hammer pattern

candle stick pattern  

A bearish hammer is a candlestick pattern that can indicate a potential reversal in an uptrend. It is identified by a small body near the top of the candlestick with a long lower shadow, resembling an inverted hammer. This pattern suggests that while there was some buying pressure during the session, sellers ultimately pushed the price down.

Here are steps to use a bearish hammer pattern:

(1) Identify the Bearish Hammer: Look for a candlestick with a small real body (the difference between the open and close prices) located at the upper end of the trading range.The lower shadow should be significantly longer than the body, and there may be little or no upper shadow.

(2) Consider the Trend: Bearish hammers are more significant when they appear after an uptrend.f the market has been rising, and a bearish hammer forms, it suggests a possible reversal.

(3) Look for Confirmation: Don't rely solely on a single candlestick pattern for trading decisions. Look for confirmation from other technical indicators or patterns.Pay attention to the trading volume. An increase in volume on the day the bearish hammer forms can provide additional confirmation.

(4) wait for confirmation candle                                               Some traders wait for the next candle to confirm the reversal. If the next candle closes lower, it may strengthen the bearish signal.

1. (5) Place Stop-Loss and Take-Profit Orders:

   • Consider placing a stop-loss order above the high of the bearish hammer candle to limit potential losses if the reversal doesn't occur.
   • Determine a target price based on technical analysis, support/resistance levels, or other relevant factors.

(6)      risk mangment                                                                                                                                 alwayes practice proper risk mangment don t risk more than you can afford to loss                               

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