The Hammer on the Candles: My Personal Experience with This Pattern

Wow, I have seen these hammer patterns in my charts! After losing quite a bit of money in cryptocurrencies, I became obsessed with understanding these patterns and I can tell you that the hammer candle has become my best ally.

The Famous Hammer

This small formation may seem insignificant, but what an internal war it represents! I see it as a desperate cry from the market. It has:

• A tiny little body up top, as they say "I can't take any more downs"
• A long tail that shows how sellers tried to push the price down but miserably failed.
• Practically without upper wick, because the bulls could hardly celebrate

Where can I find it?

It always appears when the market is bleeding - at the end of downtrends where it seems like everything is going to hell. I've also seen it form right at key supports, as if the price is bouncing against an invisible wall.

What it really means

I'll explain it to you straight: when I see a hammer, I see an epic battle. The sellers push with all their might and almost achieve victory, but suddenly, boom! The buyers counterattack with fury and regain almost all the lost ground.

Don't confuse it with its cousin

The inverted hammer also exists and does almost the same thing, but with the wick on top. Personally, I trust it less - it's like a hammer that didn't decide to give it all.

How to use it to win ( or lose less )

I am not one to jump in just because I see a hammer. I have learned the hard way that you need:

• Check with indicators like RSI ( how much money I lost by not doing it!)
• Wait for the confirmation of the next candle
• Place my order when the top of the hammer breaks
• AND ALWAYS place a stop loss below the hammer's minimum

Real case

A few months ago, Bitcoin was dropping like a stone towards $30,000. A beautiful hammer appeared right at that support, and even though I was scared to death, I bought at $30,500 with a stop at $29,800. The next candle was green and the volume exploded. What a relief I felt!

The hammer candle is not magic, but hell, it has saved my wallet more than once. Just remember that the crypto market is like a roller coaster, and a hammer only gives you a chance to hold on tight, not guarantees.