Hammer
Reversal1 candleA single-candle bullish reversal pattern with a small body and long lower wick, signaling potential trend reversal after a downtrend.
Visual Example
When It Usually Fails
This is what most courses don't teach you. These conditions turn textbook patterns into losing trades.
- Forms at resistance instead of support
- Appears in a strong bearish trend (fighting the regime)
- Volume is below average (weak conviction)
- No follow-through confirmation on next candle
- Wick is not at least 2x the body length
Why Hammer Often Fails (67%)
This pattern doesn't fail because of the pattern itself. It fails when context is wrong.
Location
Hammer at resistance instead of support
Example: A hammer forms at a weekly resistance level during an uptrend. Price rejects and continues down. Win rate drops from 61% to 28%.
Market Regime
Hammer appears in strong bearish trend
Example: Market is in established downtrend with lower lows. Hammer tries to signal reversal but trend continuation is more likely.
Order Flow
Volume below average on hammer candle
Example: Hammer has textbook shape but volume is 40% below recent average. No real buying pressure. Fake signal.
Key insight: The same Hammer that fails 67% of the time in wrong context can succeed 68%+ when all three factors align.
When It Usually Works
- Forms at established support level after a downtrend
- Volume is above average (confirms buyer conviction)
- Overall market regime is not strongly bearish
- Followed by a bullish confirmation candle
Common Traps
Hammer at resistance
Looks valid but location is wrong
Low volume hammer
Pattern forms but no real buying pressure
Counter-trend hammer
Trying to catch a falling knife
News event hammer
Volatility creates pattern, not sentiment
Historical Statistics
Based on analysis of historical data. Past performance does not guarantee future results.
Note: These statistics are for educational purposes. Individual results vary based on market conditions, timing, and risk management.
Loading knowledge base...
Hammer
Small body at top, long lower shadow (2x+ body), little/no upper shadow.
Trading hammers in the middle of ranges or during downtrends.
More meaningful at established support after a decline; requires confirmation.
Key Concepts:
Inverted Hammer
Small body at bottom, long upper shadow (2x+ body), little/no lower shadow.
Confusing with shooting star (which appears after uptrends).
Appears after downtrends at support; needs bullish follow-through to confirm.
Key Concepts:
Hanging Man
Same shape as hammer but appears after an uptrend.
Ignoring that context (uptrend vs downtrend) determines meaning.
Warning sign at resistance after uptrend; not a signal alone, needs confirmation.
Key Concepts:
Training Note: Pattern variants are educational classifications. Real-world price action rarely matches textbook definitions exactly. Always evaluate patterns in context of regime, location, and volume.
Practice This Pattern
Build intuition through daily training with real Hammer scenarios.