Pattern Detail

Bullish Hammer

Single-candle reversal trigger after a downtrend, with a small body and a long lower wick.

A real Bullish Hammer on NQ daily bars, Mar 24, 2023. Price then followed through 3.0% over the next 5 bars. The bright candles are the pattern; the dimmed bars are surrounding context.
A real Bullish Hammer on NQ daily bars, Mar 24, 2023. Price then followed through 3.0% over the next 5 bars. The bright candles are the pattern; the dimmed bars are surrounding context.
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How to read this

Everything here is in R, the setup's own risk. 1R is the distance from the entry (the pattern's closing price) to where it would be proven wrong — its lowest low over the 1 bar that form it. So "offered 2R" means price ran twice that distance in your favor at some point before the stop. It does not assume you took profit there: a target is a strategy choice.

Room offered (≥ 1R)

44.9%

Reliable

Offered at least 1× its risk before the stop, vs 38.5% for a random long entry (+6.4 pts).

Move size vs normal

0.78×

Realized range over the next 20 bars vs a random bar. Precedes a quieter stretch.

Typical room (20-bar)

1.15R

Average run in favor (capped at 3R), vs 1.01R for a random long entry.

Summary

Offered at least 1R of room 44.9% of the time vs 38.5% for a random long entry — a 6.4-point gap, wider than the ±1.2-point margin of error from chance, and it holds across the sample. A real, if modest, tendency to offer more room than the market alone.

Room offered, this setup vs a random long entry

Outcome This setup Random entry Edge
Offered ≥ 1R 44.9% 38.5% +6.4
Offered ≥ 2R 30.9% 28.0% +2.9
Offered ≥ 3R 22.5% 21.1% +1.4
Stopped < 1R 54.7% 61.0% -6.3
Went sideways 0.4% 0.5% -0.1

6,760 occurrences · 1,111,823 random-entry controls · 20-bar horizon

A bullish hammer is a single candle that often marks the end of a slide. It has a small body near the top of its range and a long lower wick, at least twice the height of the body. Sellers drove price down inside the bar, then buyers pushed it all the way back, leaving that long tail as the footprint of the rejection.

The hammer is one of the major reversal signals Steve Nison brought to Western markets in Japanese Candlestick Charting Techniques (1991), where a long lower shadow after a decline is read as a classic bottoming clue.

How to spot it

  • The market is falling into the bar.
  • The body is small and sits in the upper part of the candle’s range.
  • The lower wick is long, at least twice the height of the body.
  • There is little or no upper wick.
  • The body can be red or green. The shape matters more than the color.

The dashed box on the chart above marks the hammer on a real occurrence, with the decline before it and the move after.

The psychology

Price is falling into the bar and sellers expect more of the same. Early in the candle they get it: price drops hard, carving out that low. Then it turns. Buyers step in down at the low and lift price all the way back to the top of the range, so the candle closes near where it opened. The long lower wick is the record of that fight, a deep dip that got bought back in full.

What traders read here is a first refusal. Sellers had the room to press lower and could not hold the ground they took. The low has been tested and rejected inside a single bar, which is the earliest hint that the people in control may be losing it. Because the body sits high and the tail hangs long, the rejection looks clean rather than hesitant.

A wick like that catches the eye, but a single rejected low is only a hint. Whether it tends to lead anywhere is what the figures below sort out.

Does it actually work?

A pattern is a setup, not a trade, so the honest question is not “did it win” but “how much room did it tend to offer before it was proven wrong.” The tabs below answer that across five futures markets (Nasdaq, S&P 500, gold, crude oil, natural gas) and seven timeframes from one minute to one day.

For each occurrence we measure the room the move offered in units of the pattern’s own risk, then set it against what a random entry on the same market would have done. When the pattern offers more room more often than chance, that shows up as a real edge. When it does not, the page says so plainly.

Read it with the sample size in view. On the faster timeframes a pattern can fire thousands of times, enough to trust. On the daily chart it is far rarer, so treat those numbers as a hint rather than a verdict. Thin samples are flagged for you on the page.

How we measured it

  • Entry is the close of the final candle of the pattern.
  • One unit of risk, 1R, is the distance from that close down to the pattern’s invalidation point: the lowest low of the candle itself. If price trades through there, the setup is wrong.
  • We then follow the next 20 bars and record how far price ran in your favor, in multiples of that risk, before the stop was hit.
  • Every figure is set against a random entry on the same market and timeframe, so the market’s own drift is accounted for.
  • No profit target and no position sizing. Where you take profit is a strategy choice; this measures only the room the pattern tends to give.

What this page does not cover

  • Volume on the pattern’s candles.
  • Whether the pattern forms at a meaningful support level.
  • Pairing it with a trend filter or a confirming signal.
  • A profit target or position sizing. We use the pattern’s own invalidation point as the stop to define risk, but where you take profit, and how much you put on, are strategy decisions this page leaves to you.

Sample Bullish Hammer Firings (20)

Based on data through Apr 29, 2026

Time Risk (pts) Room offered Result
Apr 27, 2026, 1:40 AM CDT 18.5 0.39R Stopped
Apr 24, 2026, 2:45 PM CDT 13.5 1.81R Ran ≥1R
Apr 24, 2026, 6:55 AM CDT 10.5 3.00R Ran ≥1R
Apr 19, 2026, 6:45 PM CDT 13.5 1.11R Ran ≥1R
Apr 16, 2026, 6:25 AM CDT 13.25 2.74R Ran ≥1R
Apr 15, 2026, 8:35 PM CDT 9.25 2.78R Ran ≥1R
Apr 12, 2026, 11:45 PM CDT 5.25 3.00R Ran ≥1R
Apr 8, 2026, 9:55 AM CDT 66.5 1.89R Ran ≥1R
Apr 7, 2026, 10:05 AM CDT 25.25 3.00R Ran ≥1R
Mar 30, 2026, 5:40 AM CDT 14.5 3.00R Ran ≥1R
Mar 26, 2026, 9:15 PM CDT 9.5 0.00R Stopped
Mar 26, 2026, 11:15 AM CDT 49.5 0.03R Stopped
Mar 24, 2026, 4:20 AM CDT 21.75 3.00R Ran ≥1R
Mar 20, 2026, 3:45 AM CDT 21 0.46R Stopped
Mar 20, 2026, 12:10 AM CDT 13.75 2.25R Ran ≥1R
Mar 12, 2026, 11:32 PM CDT 10.75 1.35R Ran ≥1R
Mar 9, 2026, 9:15 PM CDT 11.75 0.13R Stopped
Mar 2, 2026, 4:55 AM CST 17 0.54R Stopped
Feb 26, 2026, 5:35 PM CST 18.5 0.00R Stopped
Feb 23, 2026, 11:55 PM CST 6.25 0.00R Stopped

Sample backtest

Real backtested runs of this pattern, with commissions and slippage. Open one for the full equity curve and metrics, or backtest it yourself on your own contract and dates.

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