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HAMMER This is a rare but powerful one day candle stick BULLISH reversal pattern and hence appears at the bottom of the DOWN TREND
This has a small body at the top of the day range with a lower tail at least twice the length of the body
The upper tail is very small or nil
Presence volume on the day of hammer enhances the chance of reversalBeing one day reversal pattern presence of bull candle on the following day alone CONFIRMS the bullish reversal
BUY when the price moves with volume above the top of the hammer
HANGING MAN Same as hammer but the difference is this is a bearish reversal pattern appearing at the TOP of the trend
Here also trend reversal is confirmed only when the next day candle is a bear one
SELL when the price goes below the bottom of the hanging manHammer – Lower tail should be minimum of two times of it’s body size. It should have bullish body. Upper tail should be invisible or very small in size. High Volume to support the trend reversal. BUY when it crosses the top tail of hammer.
Hanging Man- Top tail should be minimum of two times of it’s body size. It should have bearish body. Lower tail should be invisible or very small in size. High Volume to support the trend reversal. SELL when it crosses the lower tail of Hanging man.
It appears very frequently and enables short term traders to decide whether to BUY or SELL.
Hammer- When there is a continuous fall in trend then a body is formed with lower tail is two times its body,greenish and the upper tail is little visible then it is called Hammer and it is a bullish.
Hanging man-When there is bullish,then a red body is formed with upper tail is taller then it is a Hanging man(reversal of Hammer).
In both the cases volume is high.
It easily indicates the market,when Hammer is formed buy and when the graph is below the Stop loss point,we have to sell.
Hammer is when the body is smaller, the lower tail is twice more longer than the upper tail. Hammer is optimistic. It is bullish.
Hanging man is when the upper tail is twice or more longer than the Lower tail. Hanging man is pessimistic. Bearish
hammer pattern is equivalent to opening stock and closing stock and upper tail will not be visible and it is a bullish we can buy when the price breakthrough the upper tail
hanging pattern is similar to hammer but lower tail should not be visible and the upper tail covers more than a body when price price goes through lower tail we can create a short position.
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