Candlestick patterns
Hammer candlestick
A candle with a small body near the top and a long lower wick (at least twice the body), appearing after a decline.
Why it works
The long wick shows sellers pushed price down hard and buyers rejected it before the close. At a support or liquidity level it is one of the clearest signs of demand.
How to use it
Look for hammers at a level that matters, ideally after a sweep of lows. Enter above the hammer’s high, stop below its wick.
The typical mistake
Calling every long-wicked candle a hammer, even in the middle of nowhere or against a strong 4H downtrend.
FAQ
What is Hammer in trading?
A candle with a small body near the top and a long lower wick (at least twice the body), appearing after a decline.
How do you trade Hammer?
Look for hammers at a level that matters, ideally after a sweep of lows. Enter above the hammer’s high, stop below its wick.