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

Hammer Bullish Candle Patterns - What is a Hanging Man Bearish Candlestick Pattern?

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

These reversal candlestick patterns are:

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

Hammer Candlestick Pattern & Hanging Man Candle Pattern Candlesticks

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

Hammer Candle Pattern & Hanging Man Candlestick Pattern Candles

Hammer Candlestick

Hammer is a potentially bullish pattern which forms during a forex downtrend. It is named so because the market is hammering out a market bottoms.

A hammer has:

• A small body
• The body is at the top
• The lower shadow is 2 or 3 times length of 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 Candles Pattern

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

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

Hanging Man Candlestick

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

A hanging man candle has:

• A small body
• The body is at the top
• The lower shadow is 2 or 3 times 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 Candlestick

Technical Analysis of Hanging Man Candles Pattern

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

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