Hammer
A candle with a long lower wick and a short upper wick, a shape that can mean buyers pushed back.
Hammer flags a single one-minute bar whose lower wick is long next to its real body and whose upper wick is short. The lower wick must reach shadow_mult times the body (default 2.0), and the upper wick must stay within body_ratio times the body (default 0.3). It reads only that bar's open, high, low and close, so it does not check whether price was falling before the bar.
How to read it
- Markers sit on the candles that have the shape; there is no line in a pane.
- At defaults the lower wick must be at least twice the body, with the top almost flat.
- With defaults it fires on about 22% of bars, so one marker says little; read it against the trend before it.
- The clearest markers have a tiny body and a long lower wick; on a larger body the wick must be longer to qualify.
What it outputs
- Hammer
- Marks each bar whose lower wick is at least shadow_mult times its body and whose upper wick is at most body_ratio times its body.
When it fires
Fires on a bar whose lower wick is at least shadow_mult times its body and upper wick at most body_ratio times its body. Textbook meaning: buyers pushed back on lower prices within the bar. With no prior-drop check, it fires on about 22% of SPY bars, a shape, not a turn.
Settings
- Body Ratio
- Caps the upper wick at this multiple of the body (default 0.3). Raising it lets candles with a longer top wick qualify, so more markers; lowering it demands an almost flat top and fewer markers.
- Shadow Multiplier
- The lower wick must reach this multiple of the body (default 2.0). Raising it demands a longer lower wick and fewer markers; lowering it accepts shorter wicks and more markers.
Pitfalls
- It fires on about 22% of one-minute SPY bars with defaults, roughly 100 times a day. A common shape here is noise, not a selective reversal signal.
- No prior-drop check: the textbook hammer follows a fall, but this code fires after rises and in chop too.
- The catalog says body_ratio is body against candle height, but the code caps the upper wick at body times body_ratio. Bars with no body and no upper wick also fire, whatever the lower wick.