Candlestick patterns
Hammer
Usually bullish
A candle with a small body near the top and a long lower wick, appearing after a decline.
What a hammer tells you
The long wick shows a rejection of lower prices within the period. It is a hint to watch, not a reason to act by itself.
Why it forms
Sellers push price down; buyers reclaim the whole move before the close.
How traders enter it
Traders wait for the next candle to close above the hammer high, with a stop below the wick.
How it fails
Hammers in free-falling markets get run over. The wick low being taken out on the following candle is the standard invalidation.
That last section is the one worth rereading. A pattern is only useful because it comes with a level that proves you wrong — without one you have a shape and a hope.
People also ask
Is a hammer bullish or bearish?
A hammer is usually read as bullish, but only once it confirms. Before the confirming break it is a shape, and shapes fail. Context decides more than the label does.
How do you trade a hammer?
Traders wait for the next candle to close above the hammer high, with a stop below the wick.
When does a hammer fail?
Hammers in free-falling markets get run over. The wick low being taken out on the following candle is the standard invalidation.
Can ChartLens spot a hammer for me?
Yes. Photograph or screenshot any chart and ChartLens names the pattern if it is clearly formed, with a confidence level and whether it is forming, confirmed or failed — and says nothing if it is not there.
Last updated .