INVERTED HAMMER CANDLE

An inverted hammer candle is a single candlestick pattern. it has a small body, and the upper wick size is at least twice the wick size of the body. This candlestick has no lower wick.

          An inverted hammer candle looks like a shooting star and is the opposite of a hammer candle, which is a bullish reversal candle. In an inverted hammer candle, the opening, closing, and low of the candle occur almost simultaneously, and the high of the candle constitutes 80-85% of the upper shadow. A lower shadow is not formed in an inverted hammer candle.

When there is a downward trend in the market, an inverted hammer candle is formed at the lower level which indicates a bullish reversal.

                                                       

              An inverted hammer candle is also made in two types: 1. With a green candle and 2. with a red candle, in this the green candle is more effective than the red candle, in the inverted hammer candle the green candle is given more importance.                                                 

           As you can see in the chart above, the Inverted Hammer Candle forms an inverted hammer candle at a lower level as the market turns bearish. When there is a high breakout of that candle, we can create a buying position, and the low of the inverted hammer candle will be our stoploss and the target can be kept 1 to 2% upwards.

Where to Buy with the Inverted Hammer Candle? And what should be his stop-loss target?

In the above chart you can see that the nature of the stock was going down and after the formation of an upward inverted hammer candle, if there is a breakout above that candle, then you will create a position to buy in that stock, inverted hammer. The low price of the candle will be the stop loss and 1-2% of that stock's upside should be our target.

 

DIFFERENCE BETWEEN HAMMER, INVERTED HAMMER & SHOOTING STAR

Hammer Candle: When the market is in a bearish state, a hammer candle is formed at a lower level, where the opening, closing, and high of the candle are simultaneously formed upwards.

Inverted Hammer Candle When the market is in a bearish state, an inverted hammer candle is formed at the lower level, where the opening, closing, and low of the candle are formed simultaneously.

Shooting Star Candle When the market is in a bullish position, a shooting star candle is formed at the upper level, where the opening, closing, and low of the candle are simultaneously formed at the lower level.