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Strategies / Pattern / Hammer Candle Volume Confirmation

Hammer Candle Volume Confirmation

Buys on a hammer candle with a long wick 3 to 15 times its body and volume at least the prior 5-bar average, when price sits below its recent average. Exits when the midpoint falls below 90% of the entry level.

PatternLong onlySwingNasdaq 1004 hours
1.54Profit factor
16,791Net profit EUR
61.66%Win rate
725Trades
-3,164Max drawdown
23.16Avg trade

Best run of 15. Nasdaq 100, 4 hours, spread 3, from run pf:2026-10-04-NAS100-4h.tsv:11.

Entry rules, long

  2. Its volume is at least the average volume of the previous 5 candles
  3. The average open-high-low-close sum of the previous 5 candles is above this candle's open-high-low-close sum

Exit rules

  2. A later hammer candle with qualifying volume closes the long when its open-high-low-close sum is above the previous 5-candle average of that sum

Test conditions

PeriodUp to 2026-10-04
InstrumentNasdaq 100, 4 hours
Spread3 points
Starting capital1,000,000
CostsSpread only. Commissions and overnight financing are not included.
BarsUp to 200,000 bars, fewer where the instrument has less history
Last tested2026-10-04

Every run

Markets and timeframes tested

MarketTimeframePFTradesWin %NetMax DD
Nasdaq 100Best run4 hours1.54 72561.6616,791 EUR-3,164
S&P 5004 hours1.49 75161.524,251 EUR-1,006
Nikkei 2251 hourn/a 1,90755.6931,442 USD-11,466
Nikkei 2254 hoursn/a 55460.1127,175 USD-12,091
Dow JonesDailyn/a 48663.1719,704 EUR-9,557
Nasdaq 100Dailyn/a 33066.9717,639 EUR-5,956
Nasdaq 10030 minn/a 3,69851.3313,722 EUR-5,437
Nasdaq 10015 minn/a 2,80760.3111,153 EUR-3,585
Dow Jones4 hoursn/a 13261.3610,216 EUR-8,450
Dow Jones15 minn/a 2,34358.269,345 EUR-6,951
Dow Jones1 hourn/a 65659.919,264 EUR-6,931
Brent Crude30 minn/a 1,96859.156,864 EUR-4,503
Brent Crude4 hoursn/a 32961.705,801 EUR-4,421
FTSE 100Dailyn/a 32766.064,382 EUR-2,968
S&P 500Dailyn/a 43562.993,085 EUR-1,251

Charts

Results by run

Top 10 of 15 runs. The full list is in the table above.

Above 1.0 made money, below 1.0 lost money.

The code

ProBuilder code, as tested

// ==============================================================
// Hammer Candle Volume Confirmation
// ProRealAlgos Strategy Library  |  prorealalgos.com
// Type: Pattern
// Direction: Long only
// Timeframe tested: 4 hours
// ==============================================================

DEFPARAM CumulateOrders = false

ONCE buyprice = 0

sum = open + close + low + high
body = ABS(open - close)
longshadow = MAX(high - MAX(open, close), MIN(open, close) - low)
avgvol = (volume[1] + volume[2] + volume[3] + volume[4] + volume[5]) / 5
avgsum = (sum[1] + sum[2] + sum[3] + sum[4] + sum[5]) / 5

16 more lines: the entry and exit rules.

Setup

How to load it

  1. Copy the code with the copy button on the code block.
  2. In ProRealTime, open a chart of the instrument and timeframe you want to test, then open ProOrder > New trading system and choose "Create with programming".
  3. Paste the code, give the system a name and save it.
  4. Click "Backtest", set your own spread and position size, and run it before you consider trading it live.

Indicators used

Volume
Longer historyRe-run on up to 1,000,000 barsNasdaq 100 · 4 hours · older data 0.00 EUR

Nasdaq 100 had no history beyond the standard run, so both runs used 28,000 bars.

Nasdaq 100 · 4 hours

Bars available28,000
Net, standard 200,000-bar run16,791.10 EUR
Net, long run16,791.10 EUR
Net on the older data alone0.00 EUR
Read this firstKnown weaknesses2 points
  • The code sets no stop loss, so a losing trade stays open until an exit signal arrives.
  • Results include the spread only. Commissions and overnight financing are not included.

Questions

About this strategy

Can I run Hammer Candle Volume Confirmation in ProOrder?

Yes. The code is ProBuilder and runs as an automated ProOrder system. Backtest it on your own account with your own spread and position size before trading it live.

Which markets was it tested on?

It was tested on 15 market and timeframe combinations. The best run was Nasdaq 100, 4 hours, with a profit factor of 1.54 over 725 trades.

How large was the drawdown?

The best run had a maximum drawdown of 3,164 EUR at the tested position size, against a net result of 16,791 EUR.

Does it trade long, short or both?

It only takes long trades.

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Past backtest results do not guarantee future results. This is not financial advice. Curated and maintained by ProRealAlgos. ProRealTime™ is a trademark of ProRealTime SAS. prorealalgos.comStatsDocs