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.
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.