How to spot a Hammer
- Small body at the top of the candle
- Lower wick about two times the body or longer
- Little or no upper wick
- Forms after a fall, ideally at support
What the Hammer tells you
Sellers drove price down during the period, then buyers stepped in strongly enough to close it near the top. That rejection of lower prices, especially at a support zone, can be the start of a turn upward. The colour of the body matters less than the length of the wick.
How traders use it
- Wait for the next candle to close above the hammer high
- Enter on that confirmation
- Place the stop just below the hammer low
- Aim for the next resistance zone as the target
Common mistakes
- Calling any long-wicked candle a hammer, even in the middle of nowhere
- Entering before confirmation
- Putting the stop inside the wick
See it on a real chart · EP 01Candlestick Patterns for BeginnersWatch the free lesson →
Questions about the Hammer
Is a hammer candle bullish?
Yes. A hammer is a bullish reversal candle when it forms after a decline. It is stronger at support and after confirmation from the next candle.
What is the difference between a hammer and a hanging man?
They look the same. A hammer forms after a fall and is bullish; a hanging man forms after a rally and is a bearish warning.
For education only, not financial advice. The chart is an illustration of the pattern, not real market data. No pattern works every time; always use a stop-loss.