Reversal Candle Patterns and Their Confirmation: Hammer Candle Pattern & Hanging Man CFD Candlestick Pattern

Hammer Bullish Candlestick Patterns

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

The reversal candle-stick patterns are:

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

Hammer Candle Pattern and Hanging Man Candle Setup

Hammer Candle Pattern & Hanging Man CFD Candle Setup candles look alike but hammer is bullish reversal pattern and hanging man is a bearish reversal pattern.

Hammer Candle Pattern and Hanging Man Candlestick Pattern

Hammer Candlestick

Hammer is a potentially bullish pattern that forms during a downwards trend. It is named so because the cfd market is hammering out a market 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 color of the body is not important

Hammer Candle

Technical Analysis of Hammer Trading Candle Sticks Pattern

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

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

Hanging Man Candlestick

This pattern is a potentially bearish reversal signal which occurs during a upward trend. It is named so because it looks like a man hanging on a noose up high.

A hanging man candle-stick 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 color of the body is not important

Hanging Man Candle

Technical Analysis of Hanging Man CFD Trading Candlesticks

The sell signal is confirmed when a bearish candle closes below the open of the candlestick on leftside of this hanging man candle-stick pattern.

Stop orders should be set a few pips just above high of the hanging man candle.