Reversal Candle Patterns and Their Confirmation: Hammer Candle-stick Pattern & Hanging Man Candle Pattern
Hammer Bullish Candlestick Patterns
Reversal candle setups occur after an extended prior market trend. Hence, for a candlestick pattern setup formation to qualify as a reversal setup there must be a prior trend.
The reversal candlestick setups are:
- Hammer Candlestick Pattern and Hanging Man Candle Pattern
- Inverted Hammer Candle-stick Pattern and Shooting Star Candlestick Pattern
- Piercing Line Candle-stick Pattern & Dark Cloud Cover Candlestick Pattern
- Morning Star Candlesticks and Evening Star Candles
- Engulfing Candlesticks Patterns
Hammer Candlestick Pattern Hanging Man Candlestick
Hammer Candle Pattern and Hanging Man Candlestick Pattern candlesticks look alike and similar but hammer is bullish reversal pattern and hanging man is a bearish reversal pattern.
Hammer Candle Pattern and Hanging Man Candle Pattern
Hammer Candle
Hammer is a potentially bullish pattern which forms during a downward trend. It's named and called so because the market is hammering a bottom.
A hammer has:
- A small body
- The body is at the top
- The lower shadow is 2 or 3 times the length of real body.
- Has no upper shadow or very small upper shadow if present.
- The colour of the body is not important
Hammer Candlestick
Analysis of the Hammer Candlesticks Pattern
The buy signal gets confirmed when a candlestick closes above the opening price of the candle to the left side of the hammer candlestick pattern setup formation.
Stop orders should be placed a few pips just below low of the hammer candlestick.
Hanging Man Candlestick
This pattern setup formation is a potentially bearish reversal signal that occurs during a upwards trend. It's named and called so because it looks like a man hanging and dangling on a noose up high.
A hanging man candle has:
- A small body
- The body is at the top
- Lower shadow is 2 or 3 times length of real body.
- Has no upper shadow or has a very small upper shadow if present.
- The color of the body is not important
Hanging Man Candle
Analysis of the Hanging Man Candlesticks
The sell signal gets confirmed when a bearish candle closes below the open of the candlestick on left side of this hanging man candlestick pattern setup formation.
Stop orders should be set a few pips just above high of hanging man candlestick.
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