Learn 4 key single candlestick reversal patterns—Hammer, Hanging Man, Inverted Hammer, and Shooting Star—to spot bullish and bearish market turns.
Four powerful single-candle patterns that often appear at turning points. Learn where they form, what they mean, and how to confirm them.
📌 How Single-Candle Reversals Work
These patterns reflect intraperiod rejection: price tests one side (up or down) but closes back near the other end, hinting that control may be shifting. Location matters: Hammers appear after downtrends (bullish), while Hanging Man and Shooting Star appear after uptrends (bearish).
🛠️ Hammer (Bullish)
Where it appears
At the end of a downtrend or near support.
Appearance
Small real body near the top; long lower shadow (usually ≥ 2× body); little/no upper shadow.
Psychology
Sellers drove price down, buyers stepped in and pushed it back up → bullish reversal potential.
Confirmation
Bullish close after the hammer, ideally with rising volume.
🔨 Inverted Hammer (Bullish)
Where it appears
After a downtrend, often at or just above support.
Appearance
Small body near the bottom; long upper shadow; little/no lower shadow.
Psychology
Buyers tested higher prices; bears faded the move, but the test signals buying interest.
Confirmation
A strong bullish candle next bar (closing above the high of the inverted hammer).
👤 Hanging Man (Bearish)
Where it appears
At the end of an uptrend or near resistance.
Appearance
Small body near the top; long lower shadow; little/no upper shadow (same shape as a hammer but in an uptrend).
Psychology
Intraperiod selling pressure emerges during an uptrend → warning of bearish reversal.
Confirmation
Bearish close after the hanging man; watch for gap-down or lower high.
🌠 Shooting Star (Bearish)
Where it appears
After an uptrend, often at resistance or fib levels.
Appearance
Small body near the bottom; long upper shadow; little/no lower shadow.
Psychology
Bulls pushed up but failed to hold gains → sellers rejected higher prices → bearish reversal potential.
Confirmation
Bearish follow-through: close below the shooting star’s low, rising volume preferred.
🔎 Quick Comparison
| Pattern | Trend Context | Shadow Emphasis | Bias | Confirmation |
|---|---|---|---|---|
| Hammer | Downtrend | Long lower | Bullish reversal | Bullish close above hammer high |
| Inverted Hammer | Downtrend | Long upper | Bullish reversal (weaker) | Strong bullish next candle |
| Hanging Man | Uptrend | Long lower | Bearish reversal | Bearish close after pattern |
| Shooting Star | Uptrend | Long upper | Bearish reversal | Close below star’s low |
💡 Key Takeaways
- Hammer & Inverted Hammer = appear after downtrends → bullish reversal potential.
- Hanging Man & Shooting Star = appear after uptrends → bearish reversal potential.
- Always seek confirmation (next candle), volume, and level confluence.
- Manage risk with invalidation (e.g., beyond pattern highs/lows) and position sizing.
❓ FAQs
Do color (green/red) of these candles matter?
Shape and location are primary. Color can strengthen the signal (e.g., a red shooting star), but it’s not mandatory.
What timeframes are best?
All timeframes work; higher timeframes (4H, Daily) tend to be more reliable. Align multiple timeframes when possible.
How to trade them?
Wait for confirmation candle, enter near the break, place stops beyond the pattern’s extreme, target next S/R levels, and respect risk-reward.
📈 What’s Next?
Next in the series: Multiple-Candle Reversal Patterns (Bullish/Bearish Engulfing, Piercing, Dark Cloud).
Continue here ➜ Read the next guide
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