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Technical analysis

Hammer and shooting star

By Jarosław Wasiński • Published: • Updated:
Conventional candles with a small body and one long wick: a hammer has a lower wick after a decline, and a shooting star an upper wick after an advance. Ratios and context need specified criteria. The wick describes prices, not participant intentions or a certain reversal. Confirmation and filters are strategy variants to evaluate.
Example. An illustrative candle has O = 1.1000, C = 1.1005, H = 1.1007 and L = 1.0985. Its body is five pips, lower wick 15 and upper wick two. It meets a possible lower-wick requirement of at least twice the body, but geometry alone does not establish a subsequent rebound.

Location affects the name

A classical hammer has a long lower wick and small body after a decline; a similar shape after an advance is called a hanging man. A shooting star has a long upper wick after an advance, while an inverted hammer occurs after a decline. “Pin bar” covers a broader family under an author’s convention.

Turn shape into criteria

Specify wick-to-body ratio, permitted opposite wick, body location and minimum range. A zero body can make the ratio undefined, requiring a separate doji rule. Body colour and reference zones can be filters, but establish no universal ranking of reliability. Keep thresholds unchanged when evaluating the sample.

When information becomes available

An unfinished candle can change shape. Requiring a subsequent-bar confirmation delays information and cannot justify an earlier fill. A return from part of the range is an OHLC observation; demand or supply taking control is an interpretation. Evaluate every qualifying case and appropriate execution prices rather than treating the wick as a complete trading system.

FAQ

Are a pin bar and a hammer identical?
Not always. Pin bar is broader; a hammer includes the conventional shape and preceding decline.
Does a wick identify who took control?
No. It records the selected series’ extreme and body location, not participant identity.

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Jarosław Wasiński

Editor-in-chief, ForexMechanics.com • Macro & FX analyst

Independent analyst and practitioner with over 20 years of experience in financial markets. Actively involved in Forex since 2007, with a focus on fundamental analysis, OTC market structure, and disciplined capital risk management.

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