hammers-hangingman

The hammer and hanging man look the same- petite bodies dangling long shadows below them. They are both reversal patterns- look out for these if you are waiting for the market to turn before making your move.

How do you remember which is which? Well- you hammer down on something. Thus a hammer would appear at the bottom of a downtrend. It’s literally hammering out the bottom of the forex market. The colour doesn’t matter- you can get bullish and bearish hammers.

If the trend is down, and you see a hammer- loook out for a reversal. The long shadow signifies that the bears were pushing lower, but were unable to affect a drop in price.

hammer

Don’t just wade in and assume a market reversal when you see on- back it up with other evidence.

A hanging man literally hangs at the top of a candlestick chart and signifies a change in direction down. Again, the body should be petite with a long lower shadow.

Hanging Men point to a situation where the bears are beginnning to gain control over the bulls. Again, the colour isn’t important, although some would say that a red or black hanging man is a stronger bearish reversal pattern than a green one.

hanging man