Candlestick Patterns – The Spinning Top, the Hanging Man and the Hammer!
Hanging Man and the Hammer are two different candlestick patterns.
The patterns are not identical.
Hanging Man is considered to be bearish and the Hammer is considered to be bullish.How to spot the Hanging Man and the Hammer? These candlestick patterns are easy to spot on the chart.
When you spot a very small candle body accompanied by a pretty long wick on the bottom, it is a Hanging Man if it appears at the top of the uptrend and it is a Hammer if it appears at the bottom of the downtrend.In less than ideal cases, you might also find a small wick at the top of the candlestick.
When the Hanging Man or the Hammer appears, you need to look for the confirmation on the next day.If you think that you have spotted a Hanging Man appear on the top of an uptrend, wait for the next day s opening price.
If the opening day is lower than the last day s close, you have spotted a true Hanging Man.Similarly, if you spot a Hammer at the bottom of a downtrend, you need to confirm it with the opening price on the following day.
If the opening price on the next day is higher than the closing price on the last day, the Hammer formed was a true Hammer.When you trade candlestick patterns, you need to look for the confirmation on the following day to confirm that the candlestick pattern formed was indeed true.
Once you have the confirmation signal, you can safely trade on that candlestick pattern.
If you cannot get the confirmation, you should ignore that pattern considering it to be false.
Most of these candlestick patterns are ideally suited for the daily charts.A Spinning Top is another candlestick pattern that reveals a tight battle between the bulls and the bears.
Whenever, the battle between the bulls and the bears ends in a draw on a trading day, the following day, one side has to give in.
When this happens an explosive move in one direction is highly likely.How to identify a SPINNING TOP? A Spinning Top has a very small candle body in the middle with two equal wicks on the top and the bottom.
This pattern appears very frequently in the daily charts and can be highly profitable if spotted correctly.
Source: ezinearticles.com
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