Hammer Candlestick Explained
A hammer is a single candle with a small body and a long lower wick, showing that sellers pushed price down but buyers reclaimed it — a potential bottom.
Anatomy of a hammer
The hammer has a small real body near the top of the range and a lower wick at least twice the body, with little or no upper wick. It says price was driven down during the session but rejected, closing back near the open — a shift toward buyers.
The same shape at the top of an uptrend is a hanging man (bearish warning), and its inverse — a long upper wick — is a shooting star. The candle is often called a pin bar for the way it 'pins' a rejection.
Trading the hammer
A hammer is most meaningful after a downtrend and at a support or demand zone, ideally sweeping a prior low first. Confirm with the next candle closing higher before entering.
Place the stop below the wick's low. The long wick makes the risk defined and the rejection explicit — but like all single candles, it needs context, not blind faith.
See it live in Chart Bound
Chart Bound is our free game that trains exactly this — reading real charts one level at a time, with instant feedback. The fastest way to make hammer candlestick click. No card, no catch.
Play Chart Bound free → Try today's Call the Candle →Frequently asked questions
What does a hammer candlestick indicate?
A potential bullish reversal. The long lower wick shows sellers pushed price down but buyers reclaimed it by the close, most meaningful after a downtrend at support.
What is the difference between a hammer and a hanging man?
They are the same shape. A hammer appears after a downtrend (bullish); a hanging man appears after an uptrend (bearish warning). Location defines which it is.
How long should the lower wick be?
A textbook hammer has a lower wick at least twice the length of the real body, with little or no upper wick.