A small-bodied candle near the top of its range with a long lower wick, printed after a decline. Sellers pushed price down hard, but buyers drove it back up before the close.
How to identify it
- Appears after a clear down move or into support
- Lower wick at least twice the body length
- Little or no upper wick; body sits in the top third
Entry
Buy a break above the hammer high, ideally on the next candle.
Stop loss
Just below the low of the hammer wick.
Target
The nearest swing high or a 2R objective.
Invalidation
A close back below the hammer low.
Does it work for you?
Textbook reliability means little until you know your own numbers. Tag your hammer trades in TradeZento and it shows your win rate, average win and loss, and P&L per trade for this pattern, so you know whether to keep it in your playbook.