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 pattern should 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.
If this article seems useful to your then please click the like button below. You can also share your valuable feedback or ask questions in the below comment section. Also, subscribe to our newsletter for trading-related updates.