【Today's Knowledge】Pattern — Trading Strategy for Hammer Candles

🔹1. Method of Using Hammer Candlestick Patterns in Trading Strategy

The high or low point of a hammer candlestick is an important price level. When large players manipulate the market and look for stop-loss points, they leave traces.

These traces indicate that they leave important key price levels, which can serve as strong support and resistance levels.

🔹2. Higher Timeframe Analysis

(1) One way to trade these levels is by using a higher timeframe. Higher timeframe analysis can improve the win rate of trading.

(2) On a higher timeframe (e.g., 4-hour chart), draw support and resistance reversal horizontal lines at the high or low point of the long tail of the hammer candlestick.

Within lower timeframes, look for engulfing or hammer patterns at these key price levels and trade in the direction of the prevailing trend.

🔹3. Practical Application

(1) We need to identify suitable hammer candlestick patterns in historical data and draw a horizontal line at the tip of the tail. This line will serve as a key price level. These levels can be used for trend trading.

(2) Hammer candlestick patterns reveal the trading footprints of market makers. When used properly, they can help easily profit from the market.

After backtesting this pattern at least 100 times, we can easily pick out the best patterns from the chart.

The opening and closing prices of the pattern are crucial. Professional traders can analyze all timeframes based solely on the opening and closing prices.