The Hammer Candlestick: A Rejected Excursion Lower
How to define a hammer with measurable wick and body ratios, and when the shape carries information.
A hammer has a small body near the top of its range and a long lower wick. It describes a period that traded well below its close and was pushed back up before the period ended.
Because 'long wick' and 'small body' are vague, a usable definition needs ratios.
A measurable definition
A common convention requires the lower wick to be at least twice the body, the body to sit in the upper third of the range, and the upper wick to be small. These numbers are conventions, not laws — but they make the pattern countable.
Also compare candle range to recent average range. A hammer much smaller than average range rarely describes anything meaningful.
- Lower wick at least twice the body length
- Body in the upper third of the candle range
- Minimal upper wick
- Range comparable to or above recent average
Location and context
Hammers matter where a decision was expected: at a tested level, at the low of a range, after an extended decline. In the middle of a drift, they are noise with a name.
The shooting star is the inverted description — small body near the low, long upper wick — and carries the same location requirement.
Using and invalidating it
The candle's low is the natural invalidation reference. Because hammers can be large, tying risk to the wick can produce wide stops; sizing must follow, not the other way round.
Recording results
Log the ratio used, the level, the higher-timeframe condition and the outcome. Over time this tells you whether hammers in your market and timeframe are worth including in a checklist at all.