Hammer

A candle with a small body near the top and a long lower wick, appearing after a decline — buyers rejected lower prices.

A hammer is only meaningful after a decline and at a level that already mattered. The identical shape mid-range is just a candle with a long wick.

Read the mechanism rather than the name: sellers pushed price down, buyers absorbed it and closed near the high. If that story does not fit where it appeared, the pattern is decoration.

Also called: pin bar.

Taught in

Spotting Your First PatternsChart Patterns

The four patterns you'll see constantly: doji, hammer, shooting star, and engulfing.

Also covered in that lesson

DojiA candle whose open and close are almost identical, leaving little or no body — a period that ended in a draw.Shooting starA candle with a small body near the bottom and a long upper wick, appearing after an advance — sellers rejected higher prices.Engulfing candleA candle whose body completely covers the previous candle's body in the opposite direction, showing one side taking control.

Related terms

Shooting star Wick