Hammer Japanese Candlestick, Definition
On a Japanese Candlestick chart, the hammer is known as a reversal candlestick. Hammer candlesticks occur when a security moves significantly lower after the open, but rebounds to close well above the intraday low. In a perfect hammer, this tail is twice the length of the body and the candlestick will have no upper shadow or wick. The smaller the body and the longer the tail, the more significant the hammer is as a bullish indicator. Hammers form at trend bottoms. If this candlestick forms during an advance, it is called a Hanging Man.