All you wanted to know about the Hammer candlestick formation

The hammer is a reversal candlestick pattern with a long shadow and a small real body, which illustrates that the sellers failed to continue with the selling pressure through the day and the session ended with a recovery from the day’s low. Herein, the opening and close prices are significantly away from the low price. The lower shadow is bigger than the size of the real body (Open price and close price).

The hammer candlestick usually occurs during a downtrend having strong bearish sentiment. It indicates the formation of a bottom which could result in a sharp recovery.