All language subtitles for 8. How to Trade Price Action With Hammer and Hanging Man

Hello and welcome back to cryptocurrency trading masterclass by wealthy education in this video, we're

talking about trading price action with hammer and hanging man candlesticks.

So the first thing I'll do is explain what they are.

They are essentially candlesticks that look like this or some variation of this.

You know, it can look like that.

It can look like.

That it can look.

Even bigger.

As far as the body is concerned.

But the idea is you want to have a short work on top, a longer week on bottom.

Now.

It's known as a hammer, for example, because that's the mallet, there's the handle, so there's the

explanation of the name.

The only difference is a hammer is at the bottom of a downtrend and a hanging man.

It's at the top of an uptrend.

So let's take a look at this and let's think about.

What's going on during this candlestick now, in this case, it's a four hour carpet, time frames irrelevant.

You can see that we opened up, we fell hard.

We return to basically right about where we opened, it's essentially unchanged and in this case, it

really is.

And close like that, well, what does that tell you that tells you that the sellers are running out

of steam, that perhaps a reversal is in the works and a lot of times people will take a buying position

on a break above the top of that candlestick after it has formed now in a hanging man.

It's the exact opposite.

We're in a rally, we pull back, we recover a little bit.

But we're essentially unchanged, so what happens if the market the next day or hour or whatever breaks

down below the bottom of.

That means everybody in the barn up in this area is now trapped and they need to get out in order to

get out, they're going to have to sell their position, putting even more downward pressure here.

This is called a hanging man, and it's very ominous sign at the top of the move should also be noted

that the body color is irrelevant, doesn't matter.

You know, there's no real set in stone rule as to how big the body can be, but it's one of the things

you kind of know it when you see it.

The idea is that the body is small in the bottom work as well.

So with that in mind, let's take a look at some examples.

You can see right here.

There's a nice hammer.

Right here, there are two hammers.

That's a very bullish sign because it shows that, for example, right here in this four hours in Bitcoin,

you can see that they tried to sell off.

They got rejected.

They try to sell off.

They got rejected again.

So that's a very bullish sign.

And the first thing that you should notice about this is that it's right here at a support level, basically

30000.

The markets tried to break through it, they failed previously there and there, and now we've learned

a double hammer, as it were.

A break above the top of their your stop loss on the other side of whichever hammer you take when it's

a double hammer, generally put it behind the lowest and then it just takes off.

It's a sign of the market shooting higher over the longer term.

You can also try something like Bollinger bands, you know, we did pierce the Bollinger Band at this

point, so that's a sign that might be oversold.

So that's definitely something worth paying attention to.

Notice how it's a red and a green candle.

So, like I said, the.

The head body, really, the color doesn't matter, so.

Let's take a look here and Litecoin and let's look at Hammer, Hammer, hammer, hammer, probably more

of a neutral candlestick hammer just above two hammers here.

So that's another double hammer on this one.

Our chart.

Same scenario, you put a buy order in once you break the top of these two candlesticks and you go and

you can think of it this way.

This is an hourly chart.

So here's the thing.

That's actually a two hour hammer.

If you were to pull up a two hour chart, that's essentially what it would look like.

So, again, kind of the same thing, really.

And I would also anticipate that.

The Bollinger bands would show.

A bit of an oversold condition and you can see oversold right here at the support level.

Furthermore.

Would you pull up the Fibonacci retracement level?

You can see that after this move, it was a 50 percent Fibonacci retracement level and previous support

coming into play.

So obviously, a nice set up, probably got out.

If you're a ball Interbrand trader, that is probably got out at the top of it or you just held on to

it.

It really comes down to your conviction.

And a theory and now a theory has a hanging man right here, you can see that this is an area that formed

what, you know, kind of looks like a hammer.

But once you break down below the bottom of it, they and they are both trapped.

And then you can see it showed signs of exhaustion.

Basically, it's showing that, you know, the trends trying to continue, but then it runs out of momentum.

And that is a great time to look for short sales.

What was going on there that could have caused some attention to be paid to it?

Well, the 14 50 level is around figure.

It's a big figure.

It's one that will attract a certain amount of attention.

Bollinger bands, you can see that we had broken above, it had been out of it for a candlestick or

two, so once you broke down below the bottom of it, that was even stronger signal until we got to

the other side of the Bollinger band formed a hammer, probably not a perfect hammer, but a hammer

nonetheless, and then shot higher.

This is a sign that's overdone, that's really what a hanging man means, so it's kind of a perfect

example.

Stop-Loss goes on the other side of the candlestick and you just continue to aim for whatever you're

looking for.

You know, you could have been saying, OK, well, we're probably going to come back here to what should

be support after it was resistance and that was OK.

That was still a viable trade with a risk reward that was doable.

Or you could have waited until we broke to the other side of the ball in Japan.

If you had a little bit more conviction hanging man candlesticks don't happen as much as hammers, but

they are just as valid.

Now, if you break to the upside and you break above it, that's actually a continuation hammer, if

you will, not as potent of a signal.

But it does show that the the upside is still winning the battle.

In the next video, take a look at inverted hammers and shooting star candlesticks.