A hammer candlestick is a popular bullish reversal pattern in technical analysis. It typically appears at the end of a downtrend and signals potential exhaustion of selling pressure and a possible upward reversal.

Key Features of a Hammer Candlestick:
Small Real Body – The body (difference between open and close) is small, indicating minimal price movement.

Long Lower Shadow – The lower wick is at least twice the length of the body, showing strong rejection of lower prices.

Little to No Upper Shadow – The upper wick is very short or absent, meaning the price did not rise significantly after opening.

Interpretation:
A hammer suggests that sellers pushed prices down, but buyers regained control, leading to a recovery.

A green (bullish) hammer is stronger than a red (bearish) one, but both can signal reversals if confirmed.

Traders often wait for follow-up bullish candles or increased volume to validate the reversal.

Where It Appears:
Found at support levels or after prolonged declines.

Used in stocks, forex, and crypto markets for swing and intraday trading.

The hammer is a key tool for traders anticipating trend reversals, but confirmation is essential to avoid false signals.