The Ultimate Guide to Hammer Candlestick Patterns

Last updated: January 4, 2024

Hammer Pattern

This pattern appears like a hammer, hence its name:


The long lower shadow of the hammer shows that the stock attempted to sell off during the trading session, but the demand for shares helped bring the stock back up, closer to the opening price, with a green candle indicating the stock managed to close higher than the open, and a red candle indicating that the stock wasn't able to close higher than it opened.


General Identification & Interpretation

Steve Nison is credited with bringing Japanese candlestick charting to the West. In his book "Japanese Candlestick Charting Techniques" he describes hammer patterns with the following characteristics:

Typical characteristics

Examples of use as a trading indicator

More for beginners

Check out our quick start guide to candlestick charting for more information if you are new to candlestick charting!