Hammer

beginner

7 min read

Updated 2026-07-13

Reviewed by SST Editorial

A Hammer is a single-candle bullish reversal pattern that forms at the bottom of a downtrend. It has a small real body near the top of the price range and a long lower shadow (wick) that is at least twice the length of the body, with little or no upper shadow. It shows that sellers drove price lower during the session, but buyers stepped in to push it back near the open.

Key Takeaways

01.Forms after a downtrend or pullback.
02.The lower wick is at least two times longer than the real body.
03.Signals a strong intraday rejection of lower prices and potential support.
04.Confirmation is required, usually in the form of a strong bullish candle following the Hammer.

Why it matters

The Hammer provides visual proof of demand: sellers tried to make a new low but failed to sustain it. It provides a highly defined risk level, with invalidation set just below the tip of the lower wick.

When it matters

It matters most when it tests a major horizontal support level or key moving average, signaling that the level is holding.

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Visual Reference: diagram

A candle with a small body at the top and a long lower tail, resembling a hammer.

Interactive Tool: terminal-embed

Find the Hammer candle on the chart and note the price bounce immediately following its lower wick test.

Common Mistakes

Misidentifying Hammers in an uptrend

A hammer-like shape in an uptrend is called a Hanging Man, which is a bearish warning, not a bullish reversal signal. The preceding trend dictates the pattern's meaning.

📖 Real-World Example: Rejection of key support floor

During a market correction, a high-growth tech stock fell to its 200-day moving average. It gap-downed at the open, fell another 4%, but rallied to close positive, printing a classic Hammer. The next day, it surged 5%, confirming a local bottom.

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