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Trading Made Easy: Inverted Hammer Candle

Here at PennyPro our motto is “Make trading easy” and that’s what it should be, easy and fun, not complicated and impossible to follow.

Today we take a look at a specific “Candle” that can signify a down move on a chart; Inverted Hammer.

Simply put, the Inverted hammer or “plunger” if you will, has a long wick and a square base (real body) with little or no lower shadow. Since the days action goes from low to high, then back to low again, it suggests sellers mostly controlled this stock. So let’s get easy for a minute, think “plunger” and is that something you want to be trading? Heck no.

Here is the visual, along with an example on a daily chart and as you can see, the following days action was indeed down here on XBIT. When we see a specific candle, we like to wait for verification the following day.

That, is trading made easy by PennyPro.com. Click here to learn more about our programs.

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