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Hammer Pattern
A bullish reversal candlestick with a small body and long lower wick, appearing at the bottom of downtrends.
Quick Answer
A bullish reversal candlestick with a small body and long lower wick, appearing at the bottom of downtrends.
What Is the Hammer Pattern?
The Hammer is a bullish reversal candlestick that forms at the bottom of a downtrend. It has a small real body at the upper end of the trading range and a long lower shadow (at least twice the body length). The pattern shows that sellers pushed prices lower, but buyers stepped in and pushed the price back up near the open.
How the Hammer Forms
- 1Small body near the high of the candle
- 2Long lower shadow (2x body length minimum)
- 3Little to no upper shadow
- 4Forms after a downtrend
How to Confirm the Pattern
✓Appears at support level
✓Following candle closes higher
✓Volume confirms buying interest
✓RSI shows oversold condition
Best Timeframes for Hammer
1H4HDaily
How to Trade the Hammer
- →Identify potential bottom reversals
- →Time long entries at support
- →Set stops below hammer low
- →Combine with support levels
Common Mistakes to Avoid
✕Trading every hammer without context
✕Ignoring the prior downtrend requirement
✕Not waiting for confirmation
✕Confusing with hanging man
Detect Hammer Automatically
VaultCharts automatically detects Hammer patterns on your charts. No manual analysis needed - the pattern is highlighted with entry zones and targets.