Hammer and hanging man candlestick.
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Basic Rules 👇
1.A hammer and a hanging candlestick are two common chart patterns used in technical analysis to evaluate the price movements of financial assets such as stocks, currencies, and commodities.
HAMMER CANDLE
2.A hammer is a bullish reversal pattern that forms at the bottom of a downtrend. It consists of a small body with a long lower shadow and little or no upper shadow. The long lower shadow indicates that sellers pushed the price down during the trading session, but buyers eventually stepped in and drove the price back up, closing near the open. This pattern suggests that the selling pressure has been exhausted, and buyers may take control, potentially leading to a trend reversal.
3.A hanging candlestick, also known as a shooting star, is a bearish reversal pattern that forms at the top of an uptrend. It consists of a small body with a long upper shadow and little or no lower shadow. The long upper shadow indicates that buyers pushed the price up during the trading session, but sellers eventually stepped in and drove the price back down, closing near the open. This pattern suggests that the buying pressure has been exhausted, and sellers may take control, potentially leading to a trend reversal.
4.Traders use these patterns along with other technical indicators to make informed trading decisions, such as entering or exiting a position or setting stop-loss orders. It's important to note that these patterns are not always reliable and should be used in conjunction with other forms of analysis, such as fundamental analysis and market sentiment.
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