What is hammer candle Hammers have a small real body and a long lower shadow.
Hammers occur after a price decline.
The hammer candlestick shows sellers came into the market during the period but by the close the selling had been absorbed and buyers had pushed the price back to near the open.
The close can be above or below the open, although the close should be near the open in order for the real body to remain small.
The lower shadow should be at least two times the height of the real body.
Hammer candlesticks indicate a potential price reversal to the upside. The price must start moving up following the hammer; this is called confirmation.
What Does the Hammer Candlestick Tell You?
A hammer occurs after a security has been declining, suggesting the market is attempting to determine a bottom.
Hammers signal a potential capitulation by sellers to form a bottom, accompanied by a price rise to indicate a potential reversal in price direction. This happens all during the one period, where the price
