Hammer Candlesticks

Market Terms

We don't know everything about the markets.  We're just devoted to learners.  Taken from those smarter than ourselves, here's how we define Hammer Candlesticks.

A bullish trading pattern formed when a security trades significantly lower than its opening but ends up closing near the original opening price.  This creates a candlestick little to no upper shadow and a long lower shadow (typically at least double the length of the real body).  If the price starts moving up following the hammer (known as “confirmation”), hammer candlesticks indicate a reversal to the upside.