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Hammer and shooting star: put the wick in context
The same long lower wick can be called a hammer or a hanging man. What changed?
Measure wick/body proportions and distinguish shape, prior trend and confirmation.
A long wick describes distance travelled away from a small body. Its location after a rise or fall matters more than a memorable name.
A hammer candidate has a small body near the candle's high, a long lower wick and little upper wick, after a decline. A similar lower-wick shape after a rise is commonly called a hanging man. The shape alone does not tell you which context exists.
A shooting-star candidate has a small body near the low and a long upper wick after a rise. The similar shape after a decline is called an inverted hammer. Body colour alone does not decide these names or prove a reversal.
Write a measurable shape rule before looking at examples. For this paper exercise, require the main wick to be at least twice the body and the opposite wick no longer than the body. This is a chosen filter, not a universal profitable formula.
Mark the earlier trend and zone before the candidate forms. Any later confirmation belongs to a separate completed candle or written trigger. If it never arrives, keep a no-trade record. A planned stop still faces spread, gaps and slippage; a visually long wick does not set quantity safely by itself.
Let’s work through it
- Measure body and both wicks from OHLC values.
- Name the candidate only after recording the preceding trend.
- Check the paper trigger, invalidation, quantity and execution assumptions separately.
Let’s use numbers · hypothetical example
In fictional units, O=100, H=103, L=90, C=102 has body 2, lower wick 100−90=10 and upper wick 103−102=1. The lower wick is five times the body. After a decline it meets our hammer-shape filter. A separate paper plan with entry 104 and stop 89 has price risk 15 per unit before costs, not merely the body size 2.
Easy mistakes to watch for
- Calling every lower-wick candle bullish regardless of location.
- Using body colour as proof of a future reversal.
- Sizing risk from body length while ignoring the planned exit distance.
Keep in mind
These names describe candidates, not a command to buy or sell. Confirmation can also fail, and an actual stop fill may be worse than planned.
Your turn
For O=102, H=114, L=101, C=103, calculate body and both wicks. Explain how its name changes after a rise versus after a decline. For the lower-wick example, add a later close at 88. Explain why the shape alone did not guarantee a rebound.
A quick check before we move on
How long is the lower wick in the 100/103/90/102 example?
- 2 units
- A guaranteed 10-unit rebound
- 10 units
Check answer
10 units The body begins at the lower of open and close, 100. The lower wick runs from low 90 to 100, so it measures 10 units.
Sources and further reading
- www.cmegroup.com/education/courses/trading-and-analysis/technical-analysis
- www.binance.com/en/square/post/492082
- help.ctrader.com/knowledge-base/chart-types/candlesticks-chart/
Content reviewed: 29 October 2026
Educational material with hypothetical examples. Trading can cause substantial losses. A course, pattern, stop order or past result cannot guarantee a profit or limit every loss. Practise in simulation and check current rules and product terms in your jurisdiction.
