Candlestick Patterns · Bullish
Hammer
A small body near the high and a long lower shadow, after a decline.
Sellers pushed price down during the candle, and buyers brought it back before the close. The hammer is a possible reversal only when it follows a decline.
This is an example of how traders often plan the pattern. It is not a promise that price will reach the target.
Identification
- The lower shadow is at least about twice the real body.
- The real body sits in the upper part of the range.
- The upper shadow is small.
- The candles before it were declining.
Market context
The same shape after a rally is a hanging man, not a hammer.
Entry example
An example entry is the next candle closing above the hammer high.
Stop-loss example
An example stop is below the hammer's low.
Target example
An example target is the swing high that started the decline.
Common mistakes
- Buying the hammer before the decline is clear.
- Using the shape alone with no nearby level.
Candlestick and chart patterns are probabilistic observations, not guaranteed trading signals. This page does not report a win rate.