Hammer Candlestick Pattern – Formation, Explanation & Example

Rate this post

Are you searching for Hammer Candlestick Chart Pattern, How Hammer Candlestick Pattern works, How Hammer Candlestick Pattern formed and Hammer Candlestick Pattern examples then you came to the right place?

Here you will find everything about Hammer Candlestick Pattern.

What is a Hammer Candlestick?

Hammer is a single candlestick pattern, that occurs in a downtrend when bulls make a start to step into the rally. It is so named because it hammers out at the bottom of the share or any script. The lower shadow of a hammer is a minimum of twice the length of the body. Although, the color of the body is not of much significance a Green candle shows slightly more bullish implications than the Red body.

Hammer Candlestick
Hammer Candlestick

Criteria for Performing Hammer

1. The lower shadow must be a minimum of two times the length of the body.

2. There must be no upper shadow or a very small upper shadow.

3. The actual body is on the upper end of the trading range.

4. The next day needs to confirm the Hammer signal with a powerful bullish day.

5. The color of the body is just not essential though a Green body should have slightly extra bullish implications.

Also Read:  Hanging Man Candlestick Pattern - Formation, Explanation & Example

Leave a Comment