Pattern Overview
Description
Small body with a long lower wick at the bottom of a downtrend.
Meaning
Showing rejection of lower prices. Signals potential bullish reversal, especially if followed by strong buying candles.
What is the Hammer candlestick pattern?
A Hammer candlestick appears at the end of a downtrend, with a small body and a long lower wick. This shape reflects a moment when sellers pushed prices lower, but buyers managed to absorb the selling pressure and drive prices back up before the close. This pattern is particularly important for spotting potential reversals, as it indicates that buyers are beginning to reassert control.
Hammers reveal the underlying psychology of a market where buying confidence is emerging, even if sellers have dominated for a while. To successfully trade this pattern, it’s essential to confirm the reversal with subsequent candles. For traders wanting to improve their recognition of reversal signals, The Chart Guys offer courses and resources that cover essential patterns like the Hammer, helping you refine your approach.
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