Hammer Candlestick
The hammer is a bullish reversal pattern with a small body and long lower wick.
Last reviewed: 2026-03-06
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Overview
The hammer has a small body at the top of the candle and a long lower wick. It forms when price sold off sharply but buyers pushed it back up to close near the open. It suggests selling exhaustion and potential reversal, especially at support.
Identification
- Small body at the upper end of the candle.
- Long lower wick (at least 2x body length).
- Little or no upper wick.
- Can be green or red; green is slightly more bullish.
Hanging Man
The hanging man looks identical but forms at the top of an uptrend. It is bearish—sellers may be taking control. Context matters: at bottom = hammer (bullish); at top = hanging man (bearish).
Knowledge check
1 of 3The hanging man looks identical to the hammer but:
FAQ
Common questions about this topic.
What is an inverted hammer?
Hammer flipped: small body at bottom, long upper wick. Also a potential bullish reversal at support.
Where should I place a stop loss on a hammer?
Below the low of the hammer candle. If price breaks that level, the pattern failed.
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