What Is a Worked Example of a Hammer Candlestick?

Direct answer

A worked example of a Hammer is a numerical walkthrough of how you would measure one candle’s open, high, low, and close to decide whether it matches the usual Hammer shape. To keep it self-contained, the example below uses invented candle prices and states every assumption used for the measurements.

Mechanism or definition

A candlestick has four main numbers for the period you’re charting: Open, High, Low, Close. A “Hammer” is a single-candle shape characterized by:

• A small real body (the distance between Open and Close).
• A long lower wick (Low far below the body).
• Little or no upper wick (High close to the body’s top).

Because pattern labels vary across educators, the example uses explicit measurement rules instead of relying on vague wording. Here are the specific, testable assumptions used in the worked example:

1. We measure sizes in “price units” (no percentage conversion).
2. We define “small body” as body height ≤ 25% of the total candle range (High − Low).
3. We define “long lower wick” as lower wick length ≥ 2 × body height.
4. We define “little upper wick” as upper wick length ≤ 10% of the total candle range.
5. We assume the candle’s OHLC values are accurate for the timeframe shown.

Evidence or example

Worked numeric candle

Assume one candle (timeframe: your chosen period) has these made-up values:

• Open = 1.0000
• High = 1.0030
• Low = 0.9900
• Close = 1.0010

Step 1: Compute the total range.

• Range = High − Low = 1.0030 − 0.9900 = 0.0130

Step 2: Compute body size.

• Body height = |Close − Open| = |1.0010 − 1.0000| = 0.0010

Step 3: Compute wick lengths.

• For lower wick, the wick length is from the lower extreme (Low) up to the lower edge of the body.
  • Body lower edge = min(Open, Close) = 1.0000
  • Lower wick = 1.0000 − 0.9900 = 0.0100
• For upper wick, the wick length is from the upper edge of the body up to the High.
  • Body upper edge = max(Open, Close) = 1.0010
  • Upper wick = 1.0030 − 1.0010 = 0.0020

Step 4: Apply the Hammer rules.

• Small body test: body height ≤ 25% of range
  • 25% of range = 0.25 × 0.0130 = 0.00325
  • Body height = 0.0010 ≤ 0.00325 → passes.
• Long lower wick test: lower wick ≥ 2 × body height
  • 2 × body height = 2 × 0.0010 = 0.0020
  • Lower wick = 0.0100 ≥ 0.0020 → passes.
• Little upper wick test: upper wick ≤ 10% of range
  • 10% of range = 0.10 × 0.0130 = 0.0013
  • Upper wick = 0.0020 ≤ 0.0013 → fails (so it is not a Hammer under this strict rule set).

What the worked example shows

With these explicit thresholds, the candle matches some Hammer characteristics (small body and a long lower wick) but fails the “little upper wick” criterion. If you relax or change that criterion, you might classify it differently; that classification difference is the key verification point when people discuss Hammers.

Limitations and risks

• Pattern rules are not universal. Different sources use different thresholds for “small body” and “long wick,” which can change whether a candle is labeled Hammer.
• Candle OHLC values depend on the chart’s timeframe and data source. Resampling or different pricing feeds can alter Open/High/Low/Close, affecting the measurements.
• Context matters but is not determined by the candle alone. Even if the shape fits, other market structure conditions may cause a different interpretation than the “shape-only” label.
• Execution and costs can affect outcomes, but this article does not assume any specific trading method, costs, or future behavior.

Verification or next question

To independently verify whether a given candle is a Hammer, redo the same computations (range, body height, lower wick, upper wick) using your chosen thresholds, and record the pass/fail results for each rule. If you want, share the OHLC numbers you are looking at, and the same measurement steps can be applied to your exact candle—without assuming any market outcome.