Hammer Candlestick Pattern

A Hammer candlestick pattern is a bullish reversal pattern that usually appears after a downtrend, indicating that selling pressure may be losing strength. It has a small real body near the top of the candle and a long lower shadow, typically at least twice the size of the body, showing that sellers pushed prices sharply lower but buyers stepped in and drove the price back up before the close. The pattern becomes more reliable when it forms near a strong support level or demand zone and is confirmed by a bullish candle or a breakout above the Hammer's high in the following session. While the Hammer signals a potential trend reversal, traders should always wait for confirmation and use proper risk management before taking a trade.