Hammer is interpreted after a decline, Shooting Star after a rise. Distinguish measurable OHLC geometry, market context and confirmation available only later; a similar shape in a different trend may have a different name.
StockCharts describes Hammer as having a small body near the top of the range, a lower shadow at least twice the body length and a short or absent upper shadow. The body can be either color; a reversal interpretation assumes a preceding decline. [2]
Shooting Star has a small body near the bottom of the range and an upper shadow at least twice the body length. The lower shadow is short or absent. A potential downward reversal requires the context of a preceding rise. [3]
Hammer and Hanging Man have similar shapes but different preceding trends. The same applies to Shooting Star after a rise and Inverted Hammer after a decline. The OHLC of a single candle does not contain this context. [1]
StockCharts describes differing author requirements for a Gap in Shooting Star. Therefore, write down whether you require one before testing. Our example evaluates geometry only; it does not promise to meet every published definition. [3]
We calculate the body as abs(Close − Open); shadows are the distances from its boundaries to High and Low. Dividing by body length requires a nonzero body. Evaluate a zero body separately as Doji instead of substituting it into such a ratio. [1]
High, Low and Close of a live candle can change. A long shadow or a small body proportion may therefore not persist until the close. Detection using completed OHLC cannot automatically be presented as a signal available earlier. [4]
If a rule requires a subsequent candle, confirmation is known only later. Separate the times of shape completion, confirmation and trade execution; otherwise the test may contain lookahead bias. [5]
For a real test, specify the data source, Timeframe, preceding trend, entry, exit and costs including Slippage. Include unsuccessful occurrences too. A selected image or a long shadow alone does not prove traders' intentions or future profit. [5]
Two independent candles on the same price axis
For the clearest picture, read this entry together with Candlestick Pattern, Doji, Engulfing Pattern, Timeframe, Backtesting.
01Can Hammer be identified without preceding candles?+
A single candle lets you measure the shape, but not the preceding trend. Similar geometry after a rise is called Hanging Man; the name and reversal interpretation need context.
02Does a long shadow mean a certain reversal?+
No. OHLC summarizes the range, open and close, but does not itself prove the causes of a move or the future outcome. Any confirmation is new information available later.