Hammer pattern with filtered alerts and close condition

A hammer is a price pattern in candlestick charting that occurs when a security trades significantly lower than its opening, but rallies within the period to close near opening price. This pattern forms a hammer-shaped candlestick, in which the lower shadow is at least twice the size of the real body. The body of the candlestick represents the difference between the open and closing prices, while the shadow shows the high and low prices for the period.

KEY TAKEAWAYS

• Hammers have a small real body and a long lower shadow.
  
• Hammers occur after a price decline.
  
• The hammer candlestick shows sellers came into the market during the period but by the close the selling had been absorbed and buyers had pushed the price back to near the open.
  
• The close can be above or below the open, although the close should be near the open in order for the real body to remain small.
  
• The lower shadow should be at least two times the height of the real body.
  
• Hammer candlesticks indicate a potential price reversal to the upside. The price must start moving up following the hammer; this is called confirmation.
  

The study enhances standard Hammer pattern accuracy by clearing out market noises and manipulations from the indicator's triggers. Combination of Volume oscillator filter and Directional Movement Index (DMI) components values adjustments allows to detect only strong signals while RSI bands indicator is used to find the safiest signals' closure moments.

The indicator can be applied to trading pairs with USD, USDT, ETH and BTC quote currencies. It is better to check the recent performance on each particular trading pair before apply it. The Indicator supports spot, futures and marginal trading exchanges. The best performance is obtained while using at 30m timeframe and for scalping signals

Advantages of this indicator:
1. Weak signals and market noises are filtered. This allows to receive only strong and confirmed alerts
2. The indicator includes both

Study with built-in custom alerts to use with your own software through web hook connection.
Strategy with configurable risk management settings (order size, commission, take profit, stop loss and trailing). This provides you opportunity of direct broker connection and allows to conduct backtests before applying the strategy to real account

How to use?
Long signals:
1. Apply indicator to the trading pair your are interested in at 30m timeframe chart
2. Once conditions are met price action candle will be colored yellow and H label will be drawn. Place a long position and wait. The
3. Once price action breaks RSI resistance band, retraces and closes below the band the signal is finished and the position should be closed

Automatic strategy:
When conditions of long or short position from the strategy are met the script opens position.
Strategy.exit closes the position once risk management settings are met.
Strategy.close closes the position once RSI band rejection is confirmed
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Feel free to favorite the script, apply it to a chart. If you want to obtain access to the indicator please send us a personal message or leave a comment