All language subtitles for 6. Hammer & Hanging Man Candlestick Patterns

Two of the most well-established and really classic candlestick patterns are the hammer and man candlestick

pattern.

So let's look at those and how to recognize those and these you'll see fairly frequently and you can

kind of watch for them.

People really love to trade candlesticks, really watch the hammer and hanging man a lot of the time,

and that's how they trade.

So in a hammer, you have an established downtrend.

You can see here how we have those four red candlestick bars that are closest are lower than our opens

each day.

And we got lower lows kind of going each day.

And then a hammer is going to mark the end of the downtrend.

And what you'll see is you'll see where where you're going to get a green green type bar.

You're going to have a long wick on the bottom.

That's what you're looking for as a long wick on the bottom.

And not much wick necessarily on the top.

But you're looking for that long wick on the bottom.

And what's happening is your sellers are able to create some new lows.

That's why you have the long range to the long low.

They're on the bottom.

But last minute buying overcame it and actually created in higher clothes.

So it started off as far as the the opening being lower again, like the trend was continuing.

And then they tried to drive.

The sellers were trying to sell even more.

And it was a real bearish and things were trying to go even further down in price and really continue

a strong, let's say, downward trend.

But now prices are really kind of reach their exhaustion level and the lows.

And buyers are saying, no, this is maybe a good opportunity to buy.

And so they push up from that whole range of lows.

We're a long range and push it up and actually create that the close is going to be higher than the

opening and thus changing the color of the bar.

And then you'll see it kind of being confirmed over the next days.

You need to let the trend form and all that.

But this is a good recognition that something's going to happen.

And you can see over the next couple trading periods that now we get more into an upward trend where

we have higher highs is what we're seeing there.

So, you know, you're looking for that downward hammer, you're looking for that downward trend, these

low lows, and then kind of a reversal from there as I now buyers get back in and say, no, we've got

to move this up.

This is way too low.

As far as the price now hanging man is essentially the opposite.

You have an established uptrend where things have been trending upwards.

Each clothes or each open is higher than the clothes from the day before.

We have green candlesticks in this case, but it's going to hangmen marks the end of an up trend.

And if you on the security, that's the time to sell as far as at a profit on a hammer, you're looking

to get in and start writing a new trend going upwards.

But if you own a security, you see a hanging man.

Now it's time to let's watch, because this might be the time to sell.

And what's happening is bulls are people who have faith in the security.

They're unable to keep the bears from making a new low and from keeping the clothes below the open.

You know, they want to continue that uptrend.

They want to see that often happens.

But what's happening is the uptrend doesn't continue.

You have, again, this very low lows.

It looks like the hammer where you have a shavon top, but then have a long wick on the lower shadow

on the bottom.

But you can see how it's the how the candles change from green to red, that the clothes is lower than

the opening.

And so now we're anticipating a reversal and you'll see that play out in a true human pattern.

We're now the candlesticks afterwards continue.

Maybe they could go a little sideways, but you're probably hopefully looking there.

We might see a more of a downtrend there and anticipate that.

So Hammerin hangmen, the actual candle itself, has a shavon top and a long wick at the bottom.

But you want to see where they are at in the pattern.

That's the key part.

You can't just look at itself and say, OK, this is what it is.

You need that pattern coming before to kind of confirm that's going the establishing this true hammer

or hangmen chart pattern and then you can trade that indicator accordingly.