Now that you are familiar with basic candlestick patterns such as spinning tops, marabouzos and doji, let’s look at how to distinguish Japanese single candlestick patterns.

The appearance of these candles on the chart could indicate a possible return of the market.

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Here are four basic Japanese candle patterns:

Hammer and Hanging Man Pattern

The hammer and the hanging man are exactly the same, but have completely different meanings depending on the function of the price movements in the past.

Both have beautiful limbs (black or white), long shadows at the bottom and short shadows at the top, and sometimes no shadows at all.

 

Familiarity with single candlestick candle patterns

 

Familiarity with single candlestick candle patterns

Hammer candle is an ascending reversal pattern that forms during a downtrend. It’s named because the market is hammering the floor.

When the price is falling, the formation of hammers indicates that the price is close to the floor and the price starts to rise again.

The long shadow at the bottom indicates that sellers are lowering prices, but buyers have been able to overcome this selling pressure and the price close has closed near the opening price.

Just because you saw a hammer in the downtrend does not mean you have to place a purchase order on the spot!  Further confirmation is required to confirm the uptrend before sending the order and attack command .

A common example of verification is to wait for a white candle to close above the opening price of the hammer candle.

Criteria for hammer candle detection:

• The long shadow should be about two or three times the size of the body.
• Low top shadow or no shadow
• The candlestick body is at the upper end of the downtrend.
• Body color does not matter.

Hanging man or hanging man or hanging man is a reversible downward pattern that can indicate a strong resistance level or ceiling.

As prices rise, the formation of a hanging male candlestick indicates that the number of sellers is surpassing that of buyers.

The long shadow at the bottom indicates that sellers have lowered prices during the trading session.

Buyers were able to raise the price somewhat, but only close to the starting price.

Such a thing should be a wake-up call because it tells us that there is no longer a buyer to provide the necessary mobility to raise prices.

Criteria for recognizing the hanging male pattern:

• Long shadow at the bottom, which is about two or three times the size of the body.
• Short shadow at the top or no shadow.
• The body is at the upper end of the uptrend.
• Body color does not matter, although the black body indicates a downward trend more than the white body.

Reverse hammer and shooting star

The shape of the reverse hammer and the shooting star are the same. The only difference between them is whether you are in a downtrend or an uptrend.

The reverse hammer is an  ascending return candlestick  .

The shooting star is a  descending return candlestick  .

Both tiny candlesticks (full or hollow) have long shadows at the top and small shadows at the bottom or no shadows.

 

Familiarity with single candlestick candle patterns

 

Familiarity with single candlestick candle patterns

A reversal hammer candle   indicates the possibility of a reversal when the price has fallen. The long shadow on top of it indicates that buyers have tried to raise the price.

However, the sellers who witnessed and witnessed the buyers’ operations said, “No way!” And they have tried to lower the price.

Fortunately, breakfast buyers have eaten enough and managed to close a trading session near the opening.

Since the sellers were not able to lower the price, this shows that whoever wanted to sell has already sold.

And if he is no longer a salesman, then who is? buyers.

Shooting Star is  a bearish reversal pattern that is like a reversal hammer but occurs when the price is rising.

Its shape shows that the price has opened at its lowest level in this candle, a price rally has gone but has been pulled down again.

This means that buyers tried to raise prices, but sellers entered the market and showed strength. This is clearly a sign of decline as it shows that there are no more buyers left and everyone has been beheaded.

Orientation:

These are 4 very repetitive patterns in the market. Knowing them accurately can help you a lot in your analysis. It does not matter if the name of these patterns is a hammer or a man with a pendant. It is important to know that these are reversal patterns and sound the alarm for a possible reversal process.

You can summarize these 4 patterns in hammer and reverse hammer.

We have said this before and we will say it again: the occurrence of these patterns in the market is not a guarantee of return. Be sure to get more confirmations before entering the deal.

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