Hammer
A single-candle reversal pattern that forms after a decline, with a small body and a long lower wick. It shows price falling sharply within the candle and recovering towards the close. It can suggest that sellers were unable to hold price lower.
How it forms
- It follows a clear decline. The same shape after a rise has a different name and meaning.
- The lower wick is at least twice the length of the body.
- The upper wick is absent or very short: no more than about a tenth of the candle's full range (high to low).
- The body is small and sits in the upper third of the range. Its colour does not change the rule; a green body is considered slightly stronger.
A hammer is a single candle and proves nothing by itself. Many sources look for the next candle to close above the hammer's body as confirmation.
What it suggests
After the open, sellers push price clearly lower. Towards the close, buyers step in and carry price back near the opening level. The long lower wick can show that the lower prices were not accepted.
In a downtrend, candles usually close near their lows. A hammer closes near its high. This is a hint that selling pressure may be starting to fade, not proof that the direction has changed.
When it strengthens, when it weakens
Strengthens
- Forming at a support zone
- A clear decline before the pattern
- A lower wick that is very long relative to the body
- High volume
- The next candle closing above the hammer's body
- Forming on a higher timeframe (4H, 1D)
Weakens
- Forming in a flat, directionless market
- A noticeable upper wick
- The candle being very small compared with those around it
- A strong resistance zone just above
- The next candle heading back towards the hammer's low
The MarketLevelMap view
How it relates to zones
A hammer means most at a support zone. The long lower wick shows price dipping into the zone, or briefly below it, while the body closes above it. This can be read as the zone being defended on that candle.
Where the body closes matters more than the wick. If the body closes below the zone, the candle may look like a hammer, but the zone may have been lost. The tip of the wick gives a concrete reference for the zone's lower edge. If price tests that level again in later candles, it becomes clearer how solid the zone is.
If there is a resistance zone just above the hammer, there is little room for a recovery and the pattern is considered weaker.
When it is invalidated
If price closes below the hammer's lowest point (the tip of the lower wick), the bullish scenario is considered invalid. It means the prices the wick rejected are now being accepted.
If the hammer formed at a support zone, a close below the zone means the same.
Often confused with
- Hanging ManSame shape, different context: it forms after a rise and is read as bearish.
- Inverted HammerWick on the other side: a long upper wick with the body at the bottom.
- Pin BarA broader term for any long-wick rejection candle. A hammer is the lower-wick one after a decline.
For general information only. Not investment advice.Last updated: