The presence of a hammer at the end of a downtrend or decline, alerts for a possible bullish reversal.

Traders trade in the direction of the prevailing downward trend, opening mostly short positions which drives the market even lower.

As prices fall, bulls find prices attractive and then enter the market aggressively with long positions.

The session eventually concludes at the higher area of the candlestick, thus revealing the shift of the market’s psychology to positive.

Supply/Demand Demand is greater than supply.
Sentiment Positive.
Direction Bullish.
Trigger Consider buying if next candle exceeds high of the hammer.
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