Level 4 · Lesson 2 of 16 · 7 min read
Hammer, Doji, Shooting Star: Single-Candle Patterns Explained
One candle can change everything. Hammer, doji, engulfing, and more.
Researched and written by Laurent Why Single Candle Patterns Matter
Before you learn complex chart patterns, you need to recognize individual candle shapes. These are the alphabet of technical analysis. Each one tells you something about the balance of power between buyers and sellers.
The Hammer and Hanging Man
Both look identical: small body at the top, long lower wick (2x+ the body), little to no upper wick. The difference is location:
Hammer
At the BOTTOM of a downtrend
Sellers pushed price down hard, but buyers rejected it back up. Potential bullish reversal.
Hanging Man
At the TOP of an uptrend
Same shape, but buyers lost control by the end. Bears entered. Potential bearish reversal.
The Shooting Star and Inverted Hammer
Small body at the bottom, long upper wick (2x+ the body), little to no lower wick.
Shooting Star
At the TOP of an uptrend
Buyers pushed price up, sellers slammed it back down. Potential bearish reversal.
Inverted Hammer
At the BOTTOM of a downtrend
Sellers failed to close at the lows. Buyers are testing. Potential bullish reversal.
The Doji Family
A doji has (nearly) equal open and close. The body is a thin line. It means indecision: neither buyers nor sellers dominated the period.
Standard Doji
Equal wicks, tiny body. Pure indecision. In a trend, a warning sign.
Long-Legged Doji
Wild price action in both directions. Heavy indecision. High volatility warning.
Dragonfly Doji
Long lower wick, open = close = high. Sellers rejected; bullish at bottoms.
Gravestone Doji
Long upper wick, open = close = low. Buyers rejected; bearish at tops.
No pattern works in isolation. A hammer after a 2-week downtrend near a key support level is meaningful. A hammer randomly in the middle of a range means almost nothing. Location + context = signal.
Honest warning: After this lesson, you will see hammers and dojis everywhere. In every chart, every timeframe, every pair. This is normal. It is also a trap. A hammer at a random price level means nothing. A hammer at a major support level after a downtrend means something. Context is everything.
Key Takeaways
- • A hammer signals potential reversal from downtrend: small body, long lower wick.
- • A shooting star signals potential reversal from uptrend: small body, long upper wick.
- • A doji signals indecision. In a trend, it warns the momentum may be stalling.
- • Context is everything: the same candle has different meaning at different locations.