Understanding how to trade on the bullish inverted hammer

To initiate a trade using the bullish inverted hammer, wait until the open of the subsequent day. Initiate a position only if the open of that day is higher than the low of the inverted hammer day.

Think of it this way. For the bullish inverted hammer to be considered valid, it needs to be confirmed by the open of the day immediately after its appearance. If that open is higher than the signal day's low, you're clear to buy, and you should put your stop in at the same time.

Figure 7-10:

The bullish inverted hammer pattern.

Figure 7-10:

The bullish inverted hammer pattern.

MAY BE BLACK OR WHITE

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