Hammer

A hammer candle has a small real body near the high of the period and a lower wick that is typically at least twice the body height, with little or no upper wick. Visually it looks like a mallet resting on a handle. The story the shape tells is simple: price traded much lower during the period, then buyers (or short covering) pushed it back so that the close finished near the highs of that same period. Sellers were active, but they did not keep control into the close.

Location is more important than the silhouette. A hammer-like shape after a clear decline near a known support zone is more interesting for study than the same shape in the middle of a choppy range. Without prior downward pressure, a long lower wick may just be noise. Educators often contrast the hammer with the hanging man: the geometry can look similar, but the hanging man appears after an advance and carries a different contextual reading.

Confirmation language matters. Many textbooks say a hammer is confirmed if the next candle continues higher. That is descriptive hindsight, not a promise. Price can print a textbook hammer and still fall the next day if sellers return. For learning, note the hammer, mark the low of its wick as a reference, and observe whether later closes hold above that area or break it. Breaking the hammer low after a bounce is a clear invalidation of the idea that buyers defended this zone.

Risk framing should stay explicit. Candlestick names can create false confidence. A hammer does not tell you how far price will rise, whether a bounce will become a new uptrend, or what size position is appropriate. Those questions belong to structure, invalidation, and risk management lessons. Use hammers as pattern vocabulary: describe rejection of lower prices in a period, then test that description against the next sessions instead of treating the name as a forecast.