Hanging Man Vs Hammer Candlestick Pattern English

Hanging Man Vs Hammer Candlestick Pattern

The main difference between the Hanging Man and Hammer candlestick patterns is that Hanging Man appears in uptrends and suggests a potential reversal downwards, while the Hammer occurs in downtrends, indicating a possible upward trend reversal. Both have similar shapes but different contexts.

Content:

Hanging Man Candlestick Meaning

The Hanging Man candlestick is a bearish pattern signaling a potential trend reversal. It appears at the end of an uptrend and features a small upper body with a long lower shadow. This suggests selling pressure, warning of a potential downturn in price.

The Hanging Man candlestick is recognized by a small upper body and a long lower shadow, appearing at the end of an uptrend. Its shape resembles a hanging figure, hence the name.

This pattern indicates that sellers are starting to outweigh buyers, despite a bullish trend. It often serves as a warning sign for investors that the current uptrend might be losing momentum and could reverse soon.

For Example: If a stock’s price has been rising and reaches Rs 150, and then forms a Hanging Man with an open and close near Rs 145 and a low of Rs 130, it suggests a potential trend reversal from the uptrend.

Invest in Direct Mutual Funds IPOs Bonds and Equity at ZERO COST

What Is Hammer Candlestick?

A Hammer candlestick is a bullish reversal pattern occurring at the end of a downtrend. It features a small upper body and a long lower shadow, resembling a hammer. This indicates that despite selling pressure, buyers regained control, potentially leading to a trend reversal.

The Hammer candlestick is identified by its short upper body and long lower tail, appearing during a downtrend. Its unique shape resembles a hammer, indicating a strong buying interest from investors after a period of selling.

This pattern suggests a potential shift in market sentiment. Even though the price may open low and face selling pressure, a strong close near the open signifies buying strength, hinting at a possible upward trend reversal in the following periods.

For example: If a stock in a downtrend opens at Rs 120, drops to Rs 100, but then rallies to close near Rs 120, forming a Hammer candlestick, it indicates buyers are taking control, suggesting a potential upward reversal.

Difference Between Hanging Man and Hammer

The main difference between the Hanging Man and Hammer candlesticks is that Hanging Man appears in an uptrend and suggests a bearish reversal, while the Hammer forms a downtrend, indicating a potential bullish reversal. Their shapes are similar, but their contexts differ.

FeatureHanging ManHammer
AppearanceAt the end of an uptrendAt the end of a downtrend
ShapeSmall body with a long lower shadowSmall body with a long lower shadow
ColorCan be either red or greenCan be either red or green
Market ImplicationSuggests the potential for a bearish reversalIndicates potential for a bullish reversal
PsychologyIndicates selling pressure overcoming buyersShows buying pressure overcoming sellers
ConfirmationNeeds the next candle to confirm the downtrendRequires next candle to confirm uptrend
Trade Intraday, Equity and Commodity in Alice Blue and Save 33.3% Brokerage.

Hanging Man Vs Hammer Candlestick Pattern –  Quick Summary

  • The Hanging Man candlestick, a bearish pattern, signifies a potential reversal. Appearing at an uptrend’s end with a small upper body and long lower shadow, it indicates increasing selling pressure, hinting at a forthcoming price downturn.
  • The Hammer candlestick, a bullish pattern, forms at a downtrend’s end with a small body and long lower shadow, resembling a hammer. It signifies buyers overcoming selling pressure, hinting at a potential trend reversal.
  • The main difference between Hanging Man and Hammer candlesticks is that Hanging Man appears in uptrends signaling a bearish reversal, while Hammer shows up in downtrends, hinting at a bullish turnaround. Their shapes are alike, but their market indications vary.

Difference Between Hanging Man And Hammer – Faqs 

What Is The Difference Between Hanging Man And Hammer?

The main difference is that Hanging Man occurs at the end of an uptrend, suggesting a bearish reversal, while the Hammer appears in a downtrend, indicating a bullish reversal potential.

What is a hammer candlestick pattern?

The Hammer candlestick pattern is a bullish signal at the end of a downtrend, characterized by a short body and a long lower wick, indicating that buyers are regaining market control from sellers.

How do you identify a Hammer Candlestick?

A Hammer Candlestick is identified by a small upper body and a long lower shadow, at least twice the body’s length. It appears at the end of a downtrend, signaling a potential bullish reversal.

Why is Hanging Man Bearish?

The Hanging Man is bearish because it appears after an uptrend, indicating that sellers are starting to outnumber buyers. This can lead to a potential reversal as the market sentiment shifts from bullish to bearish.

Why is it called Hanging Man?

It’s called a Hanging Man because its shape resembles a figure hanging from a noose. With a small body and long lower shadow, it visually mimics a person suspended in the air, reflecting its bearish signal.

Leave a Reply

Your email address will not be published. Required fields are marked *

All Topics
Kick start your Trading and Investment Journey Today!