Candlestick Rules for Marking Hammer and Inverted Hammer Patterns

Summary

This ProRealTime indicator marks two candlestick shapes directly on a price chart. It labels an inverted hammer when a bullish candle opens at its low and has an upper shadow at least three times the candle body. It labels a hammer when a bullish candle closes at its high and has a lower shadow at least three times the body. The indicator draws a downward arrow for the first shape and an upward arrow for the second.

Key ideas

• The indicator identifies patterns by comparing candle body size with upper or lower shadows.
• An inverted hammer condition requires a bullish candle opening at its low and a long upper shadow.
• A hammer condition requires a bullish candle closing at its high and a long lower shadow.
• The script displays labels and arrows on the price chart and requires ProRealTime version 10.3 or later.
• The document supplies no trading rules, market context, backtest, or evidence that these patterns predict returns.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.