ImperialResearch
Menu

Imperial Research Hammer candle

Hammer candle: which of three identical hammers is the strongest?

A hammer has a small body near the top and a long lower wick. Sellers pushed price down, buyers took it back before the close. Like every candle, it only means something in the right place.

Checked 3 November 2026

Study 9 Three identical hammers. Which one is the strongest?
Falling then rising market with three hammer candles; C in a decline whose low is broken next, A mid-range, B sweeping a prior low before a rallyabcdefgh12345prior lowcancelCAB
Pick one, then read the solution.
Show the solution

Solution: B. B's long lower wick ran the stops under the prior low and the candle closed back near its high. The next candle broke above the last swing high, which confirmed the shift. A appeared in the middle of the range with nothing swept. C formed in a falling market and the very next candle broke its low.

Cancelled if a candle closes below B's low.

Illustrative diagram, not market data.

What makes a hammer

A small body in the upper part of the range, a lower wick at least twice the body, and a short upper wick or none. It records a fight inside one candle: sellers drove price down, buyers absorbed the selling and pushed price back up before the close.

Checklist for a hammer long

  1. Level: the wick went under a prior low, equal lows or a support zone.
  2. Close: the candle closed back above that level, near its high.
  3. Confirmation: on the 15-minute chart, price breaks the last swing high.
  4. Entry and stop: on the pullback, stop under the hammer's wick.
  5. Target: the next pool of liquidity above, at least twice the stop distance.

The hammer's mirror

Turn the chart upside down and the hammer becomes a shooting star. The logic is identical: judge the candle by what its wick took and whether price confirmed the turn.

Questions

Is a hammer bullish or bearish?

Bullish when it forms after a decline at a level: it shows buyers rejecting lower prices. In an uptrend the same shape is called a hanging man and can warn of weakness.

Hammer vs hanging man: what is the difference?

Only the location. A hammer appears after a fall, a hanging man after a rise. The shape is identical.

Does the colour of the hammer matter?

A little. A green body shows buyers finished stronger, but the wick and the close near the high matter more than the colour.

Do I need confirmation?

Yes. The safest confirmation is a break of the last swing high on a lower timeframe. Without it, a hammer in a downtrend is often followed by another leg down, as candle C in the study shows.