Hammer candles often mark an intraday reversal after selling pressure subsides. This strategy looks for a hammer pattern and enters long, anticipating a rebound.
The system requires a lower shadow at least twice the body and little upper shadow. Once identified, it buys with volume size and waits for profit or stop-loss.
- Entry Criteria: Hammer candle detected.
- Long/Short: Long only.
- Exit Criteria: Stop-loss or discretionary exit.
- Stops: Yes.
- Default Values:
- CandleType = TimeSpan.FromMinutes(5)
- Filters:
- Category: Pattern
- Direction: Long
- Indicators: Candlestick
- Stops: Yes
- Complexity: Basic
- Timeframe: Intraday
- Seasonality: No
- Neural Networks: No
- Divergence: No
- Risk Level: Medium