Kupach Trading

Hammer

BullishReversalBeginner

Sellers push price down hard, buyers slam it back. One candle.

Verdict: SkipBitcoin 4H: 111 trades, won 45%, avg trade −0.3% vs random day +0.3%. Backtest

Downtrend
Hammer: textbook shape, step by step

Price is falling. Sellers are in control, candle after candle.

step 1/6

Trade rules

DirectionLong (buy)
EntryAfter a decline, a candle CLOSES above the hammer's high within 3 candles.
Cancelled ifPrice trades below the hammer's low before that close.
Target2x the hammer, projected from the breakout
3 common mistakes
  • Buying the hammer itself instead of waiting for the close above its high.
  • Counting hammers in the middle of a range: it needs a decline to reverse.
  • Ignoring size: a tiny hammer on a quiet day means nothing.

Backtest

same rules every time · equal size · no fees · method
MarketTradesWonAvg tradeRandom day
Bitcoin · 4H · 2017-202611145%−0.31%+0.26%
US large caps (50) · 1D · 2016-202645550%+0.13%+0.47%

Verdict: SkipNever beat a random entry, and lost money in some markets.

pattern −34%random +29%
Bitcoin 4H: pattern −34% vs random day +29% over 111 trades
pattern +59%random +213%
US large caps (50) 1D: pattern +59% vs random day +213% over 455 trades

Real examples

Bitcoin · 4H

Breakout Aug 30, 2025, exit Sep 2, 2025 (target)+1.95%
Hammer highDowntrend113,667 · Aug 25, 2025Hammer107,350 · Aug 30, 2025Confirmed
Bitcoin 4H, real candles from Aug 25, 2025

Bank of America · 1D

Breakout Sep 16, 2024, exit Oct 11, 2024 (target)+5.25%
Hammer highDowntrend41.89 · Jul 30, 2024Hammer38.01 · Sep 11, 2024Confirmed
Bank of America 1D, real candles from Jul 30, 2024

Home Depot · 1D

trapBreakout Jan 12, 2022, exit Jan 14, 2022 (stop)−2.35%
Hammer highDowntrend420.61 · Dec 6, 2021Hammer380.91 · Jan 10, 2022Confirmed
Home Depot 1D, real candles from Dec 6, 2021