Hammer in Forex

A hammer is a single-candle bullish reversal pattern with a small real body near the top of its range and a long lower wick. It is classically evaluated after a decline.

How to Recognise It

Look for a lower wick that is clearly longer than the real body - often around twice the body's size or more - with little upper wick. The body can be bullish or bearish; the proportion and location of the body within the range are more important than its colour.

How to Read It

The candle shows that sellers pushed price lower but buyers were able to reclaim much of the move before the close. After a decline, especially near support, that rejection can be useful evidence. The same shape after an advance is not a hammer; context changes the pattern name and interpretation.

Context and Confirmation

Read the candle only after its timeframe has closed. A single candlestick records what buyers and sellers did during one period, but it does not guarantee what the next period will do. Its meaning becomes stronger when it appears after a relevant prior move, near a meaningful support or resistance area, and alongside clear market structure. A wick through a level is not automatically the same as a confirmed body-close break.

Key Takeaway

A hammer is a long lower rejection wick with a small body near the high after a decline. The prior down move and support context matter.