Hammer Doji Candlestick Detector Metatrader Indicator
This Metatrader indicator will scan the chart for any kind of hammer candlestick patterns. As a price action indicator it works in real time and will alert you instantly on detecting any hammer formation.
The settings let you to filter out the weaker or less clear cut cases to leave behind the strongest trading signals.
Hammer Candles: An Introduction
A standard hammer candlestick forms where the price makes a deep low and then makes a rapid recovery. This “recovery” is the key property that makes hammers useful for detecting price reversals. The recovery can either take the price back above the open level or just below the open.
Using Hammers to Detect Reversals Hammer Doji Candlestick Detector Metatrader Indicator
Hammers sometimes appear as downtrends exhaust themselves as the balance moves from the bears back to the bulls. The key points to look for in a hammer are the shadow length and the body position.
DEFINING HAMMER CHARACTERISTICS
The shadow length: The length of the shadow tells you how far the market fell before it capitulated. The capitulation is usually a very rapid event where market sentiment flips. Capitulations happen when those on the wrong side of the trend (buyers in this case) give up their positions and flood the market with sell orders. This wave of sell orders is often driven by a cascade of stop losses.
The result is that it pushes the price down rapidly and draws in new buyers who enter at more favorable levels. This provides the market with a fresh wave of upward impetus and momentum that enable it to break new highs.
SHOOTING STARS Hammer Doji Candlestick Detector Metatrader Indicator
Bearish hammers that are seen at the top of trends are often called shooting stars. In every way they’re identical to the classic hammer, just in reverse. The market dynamics are the same only the direction of the market is different. Hammer Doji Candlestick Detector Metatrader Indicator
SIDE CASES: THE “DOJI” AND THE “HANGING MAN”