Hammers are some of the most popular and easily recognisable patterns in candlestick analysis. They can be a powerful and bullish reversal signal. The hammer is probably best defined as being a signal that comes at the end of a phase of selling pressure. 

inverted hammer infographic graph pattern candlestick

After the open, the price falls to hit a new low, before a strong intraday rally and a price close at or around the high of the candlestick. The price is “hammering” out a recovery form a low. The price then continues higher in the next candlestick and the reversal takes hold.

Using Hammer signals


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