Hammer

The bullish hammer is a significant candlestick pattern that occurs at the bottom of the trend. A hammer consists of a small real body at the upper end of the trading range with a long lower shadow. The longer, the lower shadow, the more bullish the pattern.

The prior trend for the hammer should be a downtrend. A hammer can be of any colour as it does not really matter as long as it qualifies ‘the shadow to real body’ ratio. However, it is slightly more comforting to see a blue-coloured real body.