1. Hammer Candlestick
The Hammer is one of the most recognisable bullish reversal patterns. It’s a single candle with a small body near the top and a long lower wick resembling a hammer. This formation often appears at the bottom of a downtrend.
What It Means:
The long lower wick shows that while bears initially had control, pushing the price down, bulls stepped in and forced the price back up. This tug-of-war indicates that the selling pressure is weakening, and buyers are gaining strength.
Hammer Candlestick
Key Characteristics:
Small body at the upper end of the trading range.
Long lower shadow (at least twice the length of the body).
Little to no upper wick.
Typically followed by a bullish confirmation candle.