Hammer
BullishA bullish reversal pattern with a small body and long lower wick, indicating buyers stepped in after sellers pushed price down.
Pattern Visualization
How to Identify
- Small body at top of range
- Lower wick at least 2x body length
- Little to no upper wick
- Appears after downtrend
Trading Tips
Wait for confirmation candle. Enter on break above hammer high. Stop loss below hammer low.
A bullish reversal pattern with a small body and long lower wick, indicating buyers stepped in after sellers pushed price down. The hammer forms when price opens, sells off significantly, but then buyers push price back up to close near the open, creating a small body with a long lower shadow.
When to Trade
The hammer is most reliable when it appears after a sustained downtrend at support levels. It signals that sellers are losing control and buyers are beginning to step in. However, always wait for confirmation with the next candle closing above the hammer’s high before entering a trade.
Key Characteristics
- Body Location: Small body at the upper end of the trading range
- Lower Shadow: At least twice the length of the body
- Upper Shadow: Minimal or nonexistent
- Trend Context: Must appear after a downtrend for validity
Success Rate
With an 85% historical success probability, the hammer is one of the most reliable single-candle reversal patterns. This high success rate increases further when combined with other technical indicators like oversold RSI or support levels.