Hammer and hanging man
The same shape, two names: what came before decides. · 6 min
Charts in this lesson are generated. They are not real market data and predict nothing.
Hammer shape: lower wick ≥ 2× body, upper wick ≤ 25% of the range
Hammer: after a decline (at least 5 lower closes in the 8 before) · Hanging man: after a rise
range 0.49 · body 0.06 (12%) · upper wick 0.03 (6%) · lower wick 0.40 (82%)
before it: a decline (closes in the 8 candles before)
Price fell hard inside the candle, then recovered to close near the top. After a decline, that rejection of lower prices is called a hammer.
range 0.87 · body 0.12 (14%) · upper wick 0.04 (5%) · lower wick 0.71 (82%)
before it: a rise (closes in the 8 candles before)
The same shape after a rise is a hanging man. The candle is identical; the context changes the name.
A hammer after a decline. Higher or lower over the next six candles?
Worked example
Open 30.00, high 30.10, low 28.80, close 30.05 after six lower closes in eight
range 1.30 · body 0.05 (3.8%) → body ≤ 10%: this is a doji first, not a hammer
Make the close 30.20 and the high 30.25: body 0.20 (13.8%), lower wick 1.20 = 6× body, upper wick 3.4% → hammer
The hammer shape appears after 6 higher closes in 8. What is it?
Simulator round · Name the pattern in the shaded band
Generated chart. It is not real market data and predicts nothing.