Reversal Candlestick Setups and Their Confirmation: Hammer and Hanging Man Candle Setup - Bullish and Bearish Candlesticks
Hammer Bullish Candle Setups - Hanging Man Bearish Candlestick Setups
Reversal candle patterns occur after an extended prior trend. Therefore, for a candle pattern to qualify as a reversal pattern there must be a prior trend.
The reversal candle-stick patterns are:
- Hammer Candle Trading Pattern and Hanging Man Candlestick Trading Pattern
- Inverted Hammer Candle Pattern and Shooting Star Candle Pattern
- Piercing Line Candlestick Pattern and Dark Cloud Cover Candle Pattern
- Morning Star Candle Sticks & Evening Star Candles
- Engulfing Candles Patterns
Hammer Candle Pattern and Hanging Man Candle Pattern Candles
Hammer Candle Setup & Hanging Man Candlestick Setup candles look alike but hammer is bullish reversal pattern and hanging man is a bearish reversal pattern.
Hammer Candle Pattern and Hanging Man Candle Pattern Candles
Hammer Candlestick
Hammer is a potentially bullish setup which occurs 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 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 Candle
Technical Analysis of Hammer Candle Sticks Pattern
The buy signal is confirmed when a candle closes above the opening price of the candle on the left side of the hammer candle setup.
Stop orders should be set a few pips just below low of the hammer candle.
Hanging Man Candlestick
This pattern is a potentially bearish reversal signal which occurs 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 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 Candle
Technical Analysis of Hanging Man Candles Pattern
Sell trading signal is confirmed when a bearish candlestick closes below the open of the candle on left-side of this hanging man candlestick setup.
Stop orders should be set a few pips just above the high of the hanging man candlesticks.