A hammer is a single candle with a long lower wick, a small body near the top of its range, and little or no upper wick. It shows selling that was rejected within the session. In a downtrend at a tested level it is reversal evidence; the identical shape elsewhere is not.
- 1Selling wick bought back within the session
No instance passed the hard criteria in the last 7 days. This one is 8 days old and is dated as such rather than re-presented as current.
Run this hammer candlestick read yourselfWhat the engine actually checks
“Looks like one” is not a rule. Detection requires every hard criterion and scores the confluences — fail a hard criterion and it is not this setup, it is a hope with a nickname.
Hard criteria — all required
- ▪Lower wick at least twice the body length.
- ▪Body in the upper third of the candle range.
- ▪Upper wick no more than 10% of the total range.
Confluences — weighted, not required
- ▫Formation at a tested support level rather than mid-move.
- ▫A prior downtrend for the candle to reverse.
- ▫The wick sweeping a prior low before the reclaim.
- ▫Elevated volume relative to the preceding candles.
Trading it
- 1Where you are wrongA close below the hammer's low. The wick is the evidence; price trading back through the bottom of it means the rejection did not hold, and the level that produced the candle has failed.
- 2EntryAbove the hammer's high on the following candle, which requires confirmation that the rejection is being followed through. Entering at the close of the hammer itself is faster, cheaper and considerably more often wrong.
- 3ObjectiveThe nearest opposing level. A hammer is one session of evidence and should not be asked to underwrite a target several structural levels away.
Worked example — real numbers
entry above the hammer high, stop below its wick, target at the prior swing high. A valid formation offering under about 1.5R is still a valid formation and still not worth taking — valid and worth it are different questions.
Size this trade against your account →The scoreboard
Resolution by grade, market and timeframe — because a single blended number would let strong contexts carry weak ones, which is how every invented “success rate” in this category is constructed.
| Grade | Market | Timeframe | Resolution | Sample |
|---|---|---|---|---|
| A | Crypto | 4H | collecting | no resolved sample yet |
| A | Crypto | 1D | collecting | no resolved sample yet |
| A | Equities | 4H | collecting | no resolved sample yet |
| A | Equities | 1D | collecting | no resolved sample yet |
| A | FX | 4H | collecting | no resolved sample yet |
| A | FX | 1D | collecting | no resolved sample yet |
| B | Crypto | 4H | collecting | no resolved sample yet |
| B | Crypto | 1D | collecting | no resolved sample yet |
| B | Equities | 4H | collecting | no resolved sample yet |
| B | Equities | 1D | collecting | no resolved sample yet |
| B | FX | 4H | collecting | no resolved sample yet |
| B | FX | 1D | collecting | no resolved sample yet |
| C | Crypto | 4H | collecting | no resolved sample yet |
| C | Crypto | 1D | collecting | no resolved sample yet |
| C | Equities | 4H | collecting | no resolved sample yet |
| C | Equities | 1D | collecting | no resolved sample yet |
| C | FX | 4H | collecting | no resolved sample yet |
| C | FX | 1D | collecting | no resolved sample yet |
Where this traps people
Hammer vs Hanging man
Geometrically identical: long lower wick, small body at the top. The hammer appears after a decline and reads bullish; the hanging man appears after an advance and reads bearish. This is the clearest case in candlestick analysis of context, not shape, carrying the entire meaning.
Drop your chart and the engine checks it against the same hard criteria listed above — the ones it uses on every scan. First read is free and needs no account.
Questions traders actually ask
- What does a hammer candlestick indicate?
- That price sold off during the session and was bought back before the close. After a decline at a tested level it is reversal evidence; the same candle in the middle of a trend is describing volatility rather than rejection.
- Hammer vs hanging man — what is the difference?
- Nothing about the candle itself. A hammer forms after a decline and is read bullish; a hanging man forms after an advance and is read bearish. Identical shape, opposite meaning, entirely determined by what preceded it.
- How long does the wick need to be?
- At least twice the body, with the body in the upper third of the range and essentially no upper wick. Looser definitions admit ordinary candles and dilute the signal to nothing.
- Is an inverted hammer the same thing?
- No — an inverted hammer has the long wick on top with the body at the bottom, appearing after a decline. It is weaker evidence: buying was attempted and rejected, which is a more ambiguous message than selling being rejected.
- Do hammers work on crypto?
- They form constantly in crypto because volatility produces long wicks routinely. That frequency is the problem: more candles qualify, most mean less, and the level-context confluence does most of the filtering.
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