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Hammer

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A Hammer is a single Japanese candlestick pattern. It is black or a white candlestick that consists of a small body near the high with a little or no upper shadow and a long lower shadow (or tail).

A Hammer candlestick is considered a bullish pattern when formed during a downtrend.

A Hammer candlestick pattern hould meet the following criteria:

  • The candle must have either a very short upper shadow or no upper shadow at all.
  • The candle’s lower shadow must be quite tall (at least two times as height of the body).
  • The candle must form after a clear downtrend.
  • The candle’s body should be located at the upper end of the trading range.
  • The body’s color is unimportant (though a white candle hints at a more bullish bias).
  • The candle should be confirmed the following day, with the price trading above the Hammer’s body.

Don’t confuse the Hammer with the Hanging Man.

A Hanging Man looks identical but only forms at the end of an uptrend, while the Hammer forms after a downtrend.

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