A hammer is candlestick pattern which occurs when price of specific security or currency considerably trade lower than its opening price and but close near the opening price. The resulting candle look like a lollipop with long shadow that may be twice of the body, called hammer. This kind of candlestick pattern shows that, sellers came into market to push the market to decline but selling has been absorbed and buyers pushes the price back to or near to its opening price.
Hammer candlestick pattern occurs on all timeframe charts. Hammer candlestick pattern is not used in isolation. Hammers are most effective if accompanies with two or more other declining candles. Professional traders usually utilize technical indicators and trend analysis to further confirm the pattern and trend of market.