A Hammer candle — small body, long lower wick — appears at the end of a downtrend. What's the correct way to interpret it?

Question

Accepted Answer

A Hammer is a hint that buyers stepped in at the lows — it should be confirmed with volume, trend, or other evidence before acting - A Hammer has a small body and a lower wick at least twice the body's length; appearing at the end of a downtrend, it suggests buyers stepped in forcefully at the lows and pushed price back up. But no single candle pattern should drive a trade decision on its own — a Hammer doesn't guarantee a bounce. It should be weighed together with trend, volume, and support/resistance context.