Reversal Candlestick Patterns and Their Confirmation: Hammer and Hanging Man Candlestick Pattern - Bullish and Bearish Candlesticks

Hammer Bullish Candlestick Patterns - Hanging Man Bearish Candlestick Patterns

Reversal candlestick patterns occur after an extended prior trend. Therefore, for a candlestick pattern to qualify as a reversal pattern there must be a prior trend.

These reversal candlestick patterns are:

1. Hammer Candlestick Pattern and Hanging Man Candlestick Pattern
2. Inverted Hammer Candlestick Pattern and Shooting Star Candlestick Pattern
3. Piercing Line Candlestick Pattern and Dark Cloud Cover Candlestick Pattern
4. Morning Star Candlesticks and Evening Star Candlesticks
5. Engulfing Candlesticks Patterns

Hammer Candlestick Pattern and Hanging Man Candlestick Pattern Candlesticks

Hammer Candlestick Pattern and Hanging Man Candlestick Pattern candlesticks look alike but hammer is bullish reversal pattern and hanging man is a bearish reversal pattern.

Hammer Candlestick Pattern and Hanging Man Candlestick Pattern Candlesticks

Hammer Candlestick

Hammer is a potentially bullish pattern that occurs during a forex downtrend. It is named so because the market is hammering out a market bottom.

A hammer has:

• A small body
• The body is at the top
• The lower shadow is two or three times the length of the real body.
• Has no upper shadow or very small upper shadow if present.
• The color of the body is not important

Hammer Candlestick

Technical Analysis of Hammer Candlesticks Pattern

The buy signal is confirmed when a candlestick closes above the opening price of the candlestick on the left side of the hammer candlestick pattern.

Stop orders should be place a few pips just below the low of the hammer candlestick.

Hanging Man Candlestick

This pattern is a potentially bearish reversal signal that occurs during a forex uptrend. It is named so because it resembles a man hanging on a noose up high.

A hanging man candlestick has:

• A small body
• The body is at the top
• The lower shadow is two or three times the length of the real body.
• Has no upper shadow or very small upper shadow if present.
• The color of the body is not important

Hanging Man Candlestick

Technical Analysis of Hanging Man Candlesticks Pattern

The sell signal is confirmed when a bearish candlestick closes below the open of the candlestick on the left side of this hanging man candlestick pattern.

Stop orders should be place a few pips just above the high of the hanging man candlestick.