Hammer and Inverted Hammer
Explained
Learn the structure of hammer and inverted hammer candlestick patterns, and how they're typically discussed in a downtrend context.
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The hammer and inverted hammer are two related single-candle patterns commonly discussed in the context of a preceding downtrend. This guide explains their structure and the distinction between them.
The specific proportions described in this lesson have been verified against multiple technical analysis education sources.
What Is a Hammer?
A hammer has a small body located at the upper end of its range, a long lower wick (generally described as at least twice the length of the body), and little to no upper wick. The body color is generally not considered significant to this pattern's classification. A hammer is commonly discussed in the context of appearing after a downtrend.
What a Hammer Generally Reflects
A hammer is generally discussed as reflecting a period where sellers initially pushed price significantly lower, but buyers regained control and pushed the close back up near the open — sometimes described as rejected selling pressure. This is commonly discussed as a potential bullish signal when it appears after a downtrend.
What Is an Inverted Hammer?
An inverted hammer has the same general shape as a hammer, but upside down: a small body at the lower end of its range, a long upper wick (generally at least twice the body length), and little to no lower wick. Despite its name suggesting a bearish connotation, it's generally discussed as a bullish pattern when it appears after a downtrend, similarly to the hammer.
What an Inverted Hammer Generally Reflects
An inverted hammer is generally discussed as reflecting a period where buyers pushed price higher during the session, even though the close ended up lower, near the open — sometimes discussed as an early indication that selling pressure from the preceding downtrend may be losing momentum.
Both Patterns Require Context
As with the doji, both patterns are generally discussed as being more significant when they occur after a sustained downtrend, and particularly near a support zone (covered in the Market Guides module), rather than in isolation — a theme explored in more depth in this unit's final lesson.
🔖 Summary
A hammer has a small body at the top of its range with a long lower wick, while an inverted hammer has a small body at the bottom with a long upper wick — both are commonly discussed as potentially bullish patterns when appearing after a downtrend, despite their different visual shapes. As with other single-candle patterns, both are generally discussed as more significant within the context of a preceding trend and proximity to key support levels.
Frequently Asked Questions
What is the structure of a hammer candle?
A small body at the upper end of its range, a long lower wick (at least twice the body length), and little to no upper wick.
What is the structure of an inverted hammer?
A small body at the lower end of its range, a long upper wick (at least twice the body length), and little to no lower wick.
Are both hammer and inverted hammer generally discussed as bullish?
Yes, both are commonly discussed as potentially bullish patterns when they appear after a downtrend, despite their different shapes.
Does the color of a hammer's body matter?
This is generally not considered significant to the pattern's classification.
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