Hammer and hanging man
Hammer and hanging man are candles with a small body at the top and a long lower wick. After a drop it is a hammer (hints at a rise); after a rally it is a hanging man (hints at a fall).
How it works
The shape is the same: a small body near the top of the candle, a lower wick at least twice the body, and little or no upper wick. Body colour matters less. The only difference is where it appears on the chart.
A hammer appears after a decline. Sellers pushed price far down, but buyers bought back almost the whole drop by the close, a sign that demand showed up. A hanging man appears after a rally: the same shape shows there was already a sharp sell-off inside the candle, and buyers may be tiring.
Both have inverted cousins with a long upper wick: the inverted hammer and the shooting star. Like any candle pattern, hammers and hanging men are confirmed by the next candle and by a level.
SOL fell from $180 to $150. An hourly candle opened at $151, dropped to $144 and closed at $152. A $1 body and a $7 lower wick make a hammer at support. You could consider an entry above the candle's high, with a stop under $144.
A common mistake is mixing up the two and calling any long-lower-wick candle a hammer. Without a prior trend it is just a candle. First check where price came from, then whether there is a level nearby, and only then treat the pattern as a signal.
Questions and answers
What is a hammer candle in simple terms?
It is a candle after a drop with a small body on top and a long tail down. It shows price was pushed lower but buyers brought it back.
What is the difference between a hammer and a hanging man?
None in shape. A hammer appears after a drop and hints at a rise; a hanging man appears after a rally and hints at a possible fall.
Is a hammer the same as a pin bar?
A hammer is a type of pin bar with a long lower wick. Pin bar is the broader name for any candle with a long tail in one direction.
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Updated: 2026-10-19