Hammer
A single candle with a small body near the top and a long lower wick — buyers rejected a sharp intra-session sell-off — a bullish reversal signal.
The Hammer forms at the bottom of a downtrend. It has a small real body (bullish or bearish) near the session high, with a lower wick at least twice the body length and little to no upper wick. The shape looks like a hammer handle pointing down.
During the session, sellers drove price sharply lower, but buyers absorbed every bit of that selling pressure and pushed price back near the open. That recovery signals potential demand at this level.
A bullish Hammer with a closing green body is stronger. Confirmation on the next candle (close above the Hammer's body) increases reliability significantly.
On the desk
After a 15% correction, a Hammer forms right on a key Fibonacci retracement level with above-average volume. The next day closes bullish and above the Hammer's body — traders enter long with a stop below the Hammer's low.