You can now download the Hammer Pattern Forex Candlestick Strategy for free on AtoZ Markets indicators gallery.
Hammer Pattern Forex Candlestick Strategy is a combination of MT4 indicators and template. The essence of this forex strategy is to transform the accumulated history data and trading signals. Hammer Pattern Forex Candlestick Strategy provides an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.
It is important to know the characteristics of the hammer pattern so that we can easily identify this pattern.
Hammer can be seen as: The lower wick (the tail) is at least twice as large as the body and the upper wick and it is found at the major support.
- The upper wick is at least twice as large as the body and the lower wick.
- It is found at the major resistance.
- This system works on a 15-minute and 4-hour timeframe. Daily pivot points are employed on a 1 hour timeframe and weekly pivot points are utilized when trading off 4-hour timeframe.
Currency Pair: any
Timeframe: 1-hour chart and above
Trading Session: any
How to trade with Hammer Pattern Forex Candlestick Strategy?
Buy Entry Signals
- Price must be above 20-period Exponential Moving Average (EMA20) and
- EMA20 must be above 50-period Exponential Moving Average (EMA50).
- Price moved past a pivot level (S1/S2/S3/P/R1/R2/R3) and retraced back on the exponentials moving averages (Time Frame 15 min 4H Time Frame retrace back also Weekly pivot points level).
- A hammer formed.
- When the hammer candlestick closed, we enter at market price with three lots.
- Stop loss should be placed 10-20 pips below the Low of the hammer depending on the volatility of the currency pairs we’re trading.
- When price moves in our favor the same distance as our stop loss we take one lot out. For example, if our stop loss is 50 pips away from entry price,
- when we have 50 pips in profit we exit one lot.
- For the remaining two lots, we trail our stop loss a few pips (5-10 pips) below EMA20. We let our profits run and let the market decide when our positions are closed.
For sell entry
- The rules are obviously the opposite of the rules for buy (long) signals.
How to download and install an indicator?
In order to install the indicator on your MT4 platform, you need to follow these steps:
- Click on “Download Indicator” button located at the top right corner of the screen.
- Save the file to your computer.
- Extract and move the files into MT4>Indicator folder of the MetaTrader4 software file directory.
- Restart your Metatrader platform.
- Navigate to “Indicators.”
- And select “Hammer Pattern Forex Candlestick Strategy” template to apply it on the chart.
Note: This indicator was developed by T. Morris. AtoZ Markets does not carry any copyrights over this trading tool.