Candlestick patterns
Hammer and hanging man
3 min
The hammer is a single candle with a small body near the top and a long lower wick at least twice the body, with little or no upper wick. It is one of the most recognisable reversal candles.
What it shows
The long lower wick means price was driven sharply down during the period, then buyers fought it all the way back up to close near the open. That rejection of lower prices is the message.
Context decides the meaning
The exact same shape means different things depending on where it appears:
- After a downtrend, it is a hammer — a potential bullish reversal, because buyers reclaimed control at a low.
- After an uptrend, the identical candle is a hanging man — a potential bearish warning, because the period saw heavy selling even though buyers recovered.
How to use it and the limitation
A hammer is only a hint. Wait for the next candle to confirm — a strong close in the reversal direction. A hammer in the middle of a range, with no prior trend to reverse, means little. This is the core lesson of candlestick reading: the same candle has no fixed meaning without its surrounding context.
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