Trade Currency with the Inverted Hammer

Forex traders always welcome a
useful tool that makes trading
currencies easier and more
profitable.

By www.ForexConspiracyReport.com

Sometimes the tool in question is
not especially new. In fact it may be
a technical analysis tool that dates
back centuries!

Such is the case when a trader
chooses to trade currency with the
Inverted Hammer.

The Inverted Hammer is a Japanese
candlestick signal.
It is one of the dozen most used
signals in the candlestick portfolio.


When you trade currency with the
Inverted Hammer you are looking
for a symbol superimposed on the
Forex price chart.


The symbol looks like a hammer
with the head downward.


The Inverted Hammer forecasts the
upward reversal of a previous
downward trend.
In trading Forex with candlesticks it
is often just that simple.


But, what are candlesticks and how
do they make trading easier and
more profitable?


This technical method of trading
emerged among rice traders in
ancient Japan.


The truth that these traders noticed
is that price patterns tend to repeat
themselves.
Thus a trader can identify an
emerging pattern and use it as a
signal to guide further trading.


This clear and easy to read set of
signals is used today by traders in
the stock market, commodities
market, and Forex market.


A candlestick is a rectangle which is
typically superimposed on a price
chart.
The height of the candlestick
indicates the opening and closing
prices of the day.


A white candle indicates an up and
a black candle indicates a down
day.
The candle also has wicks
(shadows) on both top and bottom
ends.

These indicate the total range of
trading for the day. They are widely
used to forecast Foreign currency
rates.


To trade currency with the Inverted
Hammer signal look for a fairly
short candle with little or no lower
shadow and a longer upper
shadow.


Again, it should remind you of a
simple hammer resting on its head
with the handle sticking up.


The successfully trade currency
with the Inverted Hammer one
needs to make sure that the signal
one is looking at fits the criteria for
an Inverted Hammer.


The upper shadow must be at least
twice the length of the body.
The body can be black for a down
day or white for an up day and still
be an inverted hammer.


But, an up day is more
indicative of a market reversal
than a down day.


When this signal occurs in an
established downward trend
of a traded currency it is
indicative of a reversal in the
upward direction.


The signal needs to be
confirmed by a subsequent up
day.


When that is the case Forex
traders trade currency with
the Inverted Hammer on their
way to profits in an upward
market.


As wise traders know there is
no single most profitable
currency pair.
But, there are most profitable
ways to trade any currency
pair.

Trade currency with the
Inverted Hammer or other
major Candlestick trading
signals and enjoy an easy
way to view the market and,
very commonly, enjoy and
easy path to trading profits
as well.

Trade Currency with the Inverted Hammer

Recommended

Recommended

More Related Content

More from InvestingTips

More from InvestingTips (20)

Recently uploaded

Recently uploaded (10)

Trade Currency with the Inverted Hammer