Original subtitles

Two of the most well-established and really classic candlestick patterns are the hammer and hanging

man candlestick pattern, so let's look at those and how to recognize those and these you'll see, you

know, fairly frequently and you know, you can kind of walk for them.

People really love to trade candlesticks who really watch the hammer and hanging man a lot of the time,

and that's how they trade.

So in a hammer, you have an established downtrend.

You can see here how we have those four red candlestick bars that's showing our closers are lower than

are opens each day.

And we got, you know, lower lows kind of going each day.

And then a hammer is going to mark the end of the downtrend.

And what you'll see is you'll see, you know, where where you're going to get a green, you green type

bar, you're going to have a long wick on the bottom.

That's what you're looking for, the long wick on the bottom and not much wick necessarily on the top.

But you're looking for that long wick on the bottom.

And what's happening is your sellers are able to create some new lows.

That's why you have the long range to the long low there on the bottom.

But last minute buying overcame it and actually created in higher clothes.

So it started off as far as the the opening being lower again, like the trend was continuing.

And then they tried to drive.

The sellers were trying to sell even more, and it was real bearish and things were trying to go even

further down in price and really continue a strong, let's say, downward trend.

But now prices have really kind of reached their own exhaustion level on the lows and buyers are saying,

no, this is maybe a good opportunity to buy.

And so they push up from that whole range of lows, a real long range and push it up and actually create

that.

The close is going to be higher than the opening and thus changing the color of the bar.

And then you'll see it kind of being confirmed over the next days.

You need to let the trend form and all that.

But this is a good recognition that something's going to happen.

And you can see over the next couple of trading periods that now we get more into an upward trend where

we have higher highs is what we're seeing there.

So you know, you're looking for that downward hammer, you look for that downward trend.

These low lows and then kind of a reversal from there as enough buyers get back in and say, No, we're

we got to move this up.

This is way too low.

As far as the price, now hanging man is essentially the opposite.

You have an established uptrend where things have been trending upwards, each close or each open is

higher than the close from the day before.

You know, green candlesticks in this case, but it's going to hang him and marks the end of an up trend.

And if you own the security, that's the time to sell.

As far as at a profit, you know, on a on a hammer, you're looking to get in and start riding a new

trend going upwards.

But if you own a security, you see a hanging man.

Now it's time to let's watch because this might be the time to sell.

And what's happening is, you know, both are people who have faith in the security.

They're unable to keep the bears from making a new low and from keeping the close below the open.

You know, they want to continue that uptrend.

They want to see that uptrend happens.

But what's happening is the uptrend doesn't continue.

You have again, this very low lows.

It looks like the hammer where you have a shaven top and then have a long wick and lower shadow on the

bottom.

But you can see how it's the you know how the candles changed from green to red, that the closes is

lower than the opening.

And so now we're anticipating a reversal and you'll see that play out in a true hanging man pattern,

where now the candle sticks afterwards continue.

Maybe they could go a little sideways, but you're probably hopefully looking.

Or we might see a more of a downtrend there and anticipate that.

So hammer and hanging man on the actual candle itself has a shaven top and a long wick at the bottom.

But you want to see where they are at in the pattern.

That's the key part.

You can't just look at itself and say, Oh, this is what it is, you need that pattern coming before

to kind of confirm that, you know, going that it's establishing this true hammer or hanging man chart

pattern, and then you can trade that indicator accordingly.