Hammer and hanging man

A hammer and a hanging man are candlestick patterns with the same visual shape, a small body near the top of the candle's range and a long lower wick at least twice the length of the body, with little or no upper wick. The two patterns are identical in appearance and are distinguished entirely by where they appear on the chart.

A hammer forms after a downtrend and is read as a potential bullish reversal signal. The long lower wick shows that sellers pushed the price sharply lower during the session, but buyers stepped in forcefully enough to push it back up near the open by the close, suggesting selling pressure may be running out. A hanging man forms after an uptrend and carries the same shape but a more cautionary reading, the long lower wick shows that sellers were able to push price down sharply intraday even during an uptrend, a sign that selling pressure is starting to creep in, even though buyers still managed to push the close back up near the open that particular session.

As with most patterns built from a single candle, neither signal is generally treated as reliable on its own. Traders typically wait for confirmation from the next session or two, such as a strong follow-through close in the expected direction, before treating a hammer or hanging man as an actual turning point rather than just a single session's noise.