To perform a lunge holding a sledgehammer, you would start by standing with your feet hip-width apart and holding the sledgehammer with both hands. Then, you would step forward with one foot and lower your body down into a lunge position, making sure to keep your front knee aligned over your ankle and your back leg straight. At the bottom of the lunge, you would twist your torso to one side, bringing the sledgehammer down and around so that it is parallel to the ground on the side of your body that you are twisting toward. 

You should feel your core muscles engage as you twist and maintain a strong, stable position throughout the movement. From there bring the sledge hammer back to starting position before twisting, then come out of lunge and repeat for the other leg. 

This exercise can help to improve your balance, coordination, and core strength.