Hammer candlestick pattern
A hammer has a small body at the top and a long lower wick. It appears after a fall and shows that sellers pushed price down but buyers pulled it back up.
How to spot a Hammer
- A small body near the top of the candle.
- A lower wick at least about twice as long as the body.
- Little or no upper wick.
- It forms after a decline. The same shape after a rise is a hanging man.
Memory tip: Long tail underneath, and it shows up after prices fell.
What it usually means
Price was rejected at the lows. Buyers stepped in hard enough to pull the close back near the open, which can mark a possible bottom.
What traders wait for
Traders usually want the next candle to close above the hammer's body, and often look for it at a support level, before treating it as meaningful.
Common mistakes
- Calling a hammer in the middle of a sideways market. It needs a decline before it.
- Entering without a stop. A hammer that fails can keep falling, so risk should be defined first.
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Play Candlr freeQuestions people ask
What is a Hammer candlestick?
A hammer has a small body at the top and a long lower wick. It appears after a fall and shows that sellers pushed price down but buyers pulled it back up.
How do you spot a Hammer?
A small body near the top of the candle. A lower wick at least about twice as long as the body. Little or no upper wick. It forms after a decline. The same shape after a rise is a hanging man.
Is a Hammer bullish or bearish?
It is usually read as bullish (a possible move up). Price was rejected at the lows. Buyers stepped in hard enough to pull the close back near the open, which can mark a possible bottom.
Is a Hammer reliable on its own?
No pattern is a guarantee. Traders usually want the next candle to close above the hammer's body, and often look for it at a support level, before treating it as meaningful. Always decide your risk before you act, and treat patterns as clues, not predictions.
Related patterns
- Doji Open and close are almost equal, so buyers and sellers fought to a draw. It signals indecision.
- Inverted Hammer A small body with a long upper wick after a drop. Buyers are starting to test higher prices.
- Hanging Man Looks exactly like a hammer, but it appears after a rise. Sellers managed a big dip, a warning sign.
- Shooting Star A small body with a long upper wick after a rise. Buyers pushed price up but sellers rejected it.
Candlr is educational. Candlestick patterns describe what price did, they do not predict what it will do next, and nothing here is financial advice. Trading involves a high risk of loss.