The hammer and the shooting star are two single-candle patterns that mark potential reversals. They're simple to spot and, in the right place, genuinely useful.
The hammer
A hammer has a small body near the top and a long lower wick — like a hammer. It forms after a decline and shows that sellers pushed price down hard, but buyers slammed it back up by the close. At a support level after a downtrend, it's a potential bullish reversal.
The shooting star
The mirror image: a small body near the bottom and a long upper wick. It forms after a rally and shows buyers pushed price up, but sellers rejected it back down. At resistance after an uptrend, it's a potential bearish reversal.
What makes them valid
Location is everything:
- A hammer at support after a downtrend matters. A hammer mid-range is noise.
- A shooting star at resistance after a rally matters. One in the middle of nowhere doesn't.
The longer the rejection wick relative to recent candles, the stronger the signal.
How to use them
- Wait for confirmation — the next candle following through in the reversal direction.
- Stop beyond the wick — where the rejection clearly failed.
- Combine with trend and other candlestick patterns and the engulfing pattern.
A long wick is the market rejecting a price. Where it happens decides whether the rejection means anything.
Education only — not financial advice.