Hammer and Hanging Man Patterns

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Hammer and Hanging Man Patterns

Hammer and Hanging Man Patterns are quite identical, but they have opposite function.

“Hammer” is a reversal pattern toward bullish, or it is called as a bullish reversal pattern than happens in a decreasing trend. It is called “Hammer” because of the form that look like a hammer from below. After selling condition continues (decreasing trend), a hammer pattern shows the presence of “awakening”. It can be seen from a huge selling pressure, but eventually the sellers push back and pull up the price. Even though “Hammer” can indicate a reversal pattern, the real truth must be supported with other indicators, such as white colored marubozu.

Hammer and Hanging Man Patterns

The main criteria of Hammer:

A long bottom tail, much longer than the body
Only has a short upper tail, even there is none at all
The body is up-side
The color of body is not giving any impact

“Hanging Man” is a reversal pattern toward bearish, or is called as a bearish reversal pattern than happens in an increasing trend. It is called as “Hanging Man” because of the form and the position that look like a hanging man. After buying condition continues, a hanging man pattern indicates a weakening. It can be seen from the reversed pressure of sellers that cause the price decreased, but eventually the buyers can pull up the price. That pattern still needs to be further proved by noticing other indicators, especially if the morabozu pattern is black.

The main criteria of Hanging Man:

A long bottom tail, much longer than the body
Only has a short upper tail, even there is none at all
The body is up-side
The color of body is not too influencing, but the black color can refer to a reversal pattern which is very likely to happen.

Inverted Hammer and Shotting Star

This pair is similar in appearance but having a different function. Both of them have small bodies, long upper tails, and short below tail, even there is none.