I've noticed that many beginners overlook one of the most reliable patterns for day trading. We're talking about the bullish hammer—a classic reversal pattern that works if read correctly.

This candle forms at the very bottom of a trend and indicates that buyers have taken control. The key is not the color but the structure itself: a small body and a long lower wick, like a real hammer. A green candle suggests stronger buying interest, but a red hammer can also be a signal.

When I look at charts, I always pay attention to the context. If there was a strong decline before the hammer, then the recovery usually happens with an equally powerful upward wave. On the 15-minute CADJPY chart, this was clearly visible—the pattern formed at a support level where bears couldn't break further.

Practical tip: the bullish hammer works best when you tie it to support and resistance levels. This helps more accurately identify where the decline started and where it might reverse. In the CADJPY example, a series of hammers appeared, and after the second one, it was clear that a reversal would occur.

To enter a trade, wait for confirmation after the second hammer candle. Place your stop slightly below the pattern's low. If the downward move was aggressive, then the bullish hammer is exactly what you should pay attention to. These models often offer good risk-reward ratios for intraday trading.