The hammer stock trading pattern describes a candlestick which looks like this picture.  That is to say, the candlestick for the day looks like a large hammer.

There are two ways to create this shape for the candlestick.  The stock price always opens near the high, falls, then pulls back toward the high.  The stock’s closing price will be slightly higher or lower than the the opening price.  In this picture the closing price is slightly lower, because the candle is red.  If you switched the open and close prices, the color would change, but the picture would still look like a hammer.  The name “hammer” refers to both patterns.

Trade-Ideas takes multiple approaches to candlesticks.  For daily patterns, we track all the motion within the candle, as illustrated by the green arrow.  Our pullback alerts can show you the same pattern.  These alerts notify you at any time during the day when a hammer pattern is forming.

We also report hammers on various intraday timeframes.  These are reported as soon as the candle ends.

Alert Types

We offer the following alert types which are related to this topic.  Click on the icon for a detailed description of the alert, or click on the example link for additional samples of each type of alert.