Start path
📊 Price Action·beginner

Hammer

A candlestick with a small body near the top and a long lower wick — a bullish reversal signal after a downtrend.

A hammer looks like exactly what it sounds like: a small body near the top with a long lower wick sticking down. The long wick shows that sellers pushed price way down during the period, but buyers took control and pushed it all the way back up before the close. Hammers are reversal signals, but only after a downtrend. A hammer in the middle of consolidation is just a candle. A hammer at the end of a 5-day sell-off at major support is a signal that the sellers are exhausted. The mirror image is the "shooting star" or "inverted hammer" — a small body at the bottom with a long upper wick, which is bearish at the top of an uptrend.

Open TradingView charts →·Review Genesis FX →

Real trade example

Apr 2024 hammer on Gold at $2,270 support after a 3-day pullback. Next day broke above hammer high, ran $80 to new ATHs within 5 sessions.

Frequently asked about hammer

What is a hammer in trading?+
A candlestick with a small body near the top and a long lower wick — a bullish reversal signal after a downtrend.
When will I see hammer used in real trading?+
At the bottom of selloffs near support, after bad news has been digested, at key Fibonacci levels.
What is the most common mistake traders make with hammer?+
Entering a long INSIDE the hammer candle without waiting for confirmation. A hammer alone doesn't complete the reversal — you want the NEXT candle to close above the hammer body before you act.
What do experienced traders know about hammer that beginners don't?+
The best hammers have a lower wick at least 2x the body length. Smaller wicks are not hammers, they're just small candles.

Related terms

Candlestick

beginner

A single price bar that shows open, high, low, and close for a given time period — the foundation of technical analysis.

Pin Bar

intermediate

A candlestick with a long wick in one direction and a small body at the opposite end — a rejection of that price level.

Shooting Star

beginner

A bearish candlestick with a small body at the bottom and a long upper wick — a rejection of higher prices at the top of an uptrend.

Engulfing Candle

intermediate

A candle whose body fully swallows the previous candle's body — a strong reversal signal.

Support

beginner

A price level where buyers have historically stepped in to stop the decline and turn price back up.

Inside Bar

intermediate

A candle whose entire range (high to low) is contained within the previous candle's range — a sign of consolidation and pending breakout.

← Back to glossaryAsk the desk a follow-up →
Practice stack

Read the lesson here. Mark the chart on TradingView. Compare brokers with the checklist.

TradingView is the chart workspace most learners already recognize: watchlists, alerts, drawings, and clean multi-market charts. Broker research stays methodology-first: jurisdiction, costs, platform, withdrawals, and risk before any account decision.

Open TradingView chartsRead broker checklistRead broker method

TradingView is charting software, not a signal. Check broker eligibility, funding timing, and risk before opening anything.