This pattern appears at the end of a bearish cycle.
The number 1 candle is the Hammer candle. The Hammer candle has a shadow twice as long as the real body – possibly longer. Hammer candlestick can be a red candle (bearish candle) or green candle (bullish candle).
Candle 2 is a confirmation candle. There are 2 cases below:
• If candle 2 is a green candle (bullish candle), we will execute a BUY order on the next 3 candle.
• If candle 2 is a red candle (bearish candle), we will stay out of the market.
Candle 3 is the entry candle. We enter a buy order when the 3rd candle opens and close the order when the 3rd candle closes.