Hammer

The Hammer is a common single-line pattern that appears as a long line in a downtrend. It is characterized by a candle with a long lower shadow, two or three times longer than the body. This requirement means that a candle can be one of the following: White Spinning Top or Black Spinning Top. The presence of an upper shadow is allowed. Also, the entire body of the candle must be located below the trend line for the pattern to be considered valid.

Although the pattern belongs to the group of bullish reversal patterns, very often it happens that it is simply a short pause in the falling market, after which the price moves even lower. The Hammer works best in a long downtrend and its appearance after dips that last only two or three candles usually does not matter. Its appearance inside a support zone has a strong meaning. Like any single-line pattern, the Hammer requires confirmation within the next two or three candles, during which the closing prices should be higher than the closing price of the pattern's body.

The Hammer can also appear, for example, as the second line of the Bullish Harami pattern and as the first and second lines of the Tweezers Bottom pattern.

It has already been said that the height of the Hammer's lower shadow cannot exceed more than three times the height of the body. If the lower shadow exceeds that height, we are dealing with the Takuri Line pattern. In other words, the Takuri Line is like the Hammer but with a very long lower shadow.