Definition:

A Hanging Man is a bearish candlestick pattern that develops after an up leg and has the exact appearance of a hammer. This candlestick opens bullish but sells off dramatically. After the sell off, the price rallies and closes near the high of the bar and well off the lows. This candlestick has an open and close near each other with a long lower shadow.

Background:

The real body's color is of no importance, but in the classic version of this candlestick, the lower shadow must be two times or more the length of the real body with little to no upper shadow.

Conversely, if this candlestick is formed after a down leg, it is considered a Hammer candlestick.

Practical Use:

Technical analysts often use Hanging Man candlestick patterns as the beginning of sell signals especially when in context of another tradable sell pattern.

Definition:

Morning Star is a three candlestick bullish candlestick pattern that occurs after a down leg and starts out with a down bar with a relatively large real body. The second candle has a narrow range and gaps down on the open. The last bar gaps up and then closes as a bullish candlestick above the midpoint of the body of the first bar.

Practical Use:

Technical analysts will often use the Morning Star candlestick pattern as a bullish signal for buying opportunities. Additional confirmation in the form of a bullish trade setup is typically necessary before the trader will buy into a position.

Definition:

An Evening Star is a three candlestick bearish candlestick pattern that occurs after an up leg and starts out with an up bar with a large real body. The second candle has a narrow range and gaps up on the open. The last bar opens with a gap down and then closes as a bearish candlestick below the midpoint of the body of the first bar.

Practical Use:

Technical analysts will often use the Evening Star Candlestick pattern as a bearish signal for selling opportunities. Additional confirmation in the form of a bearish trade setup is typically necessary before the trader will sell into a position.

Definition:

Bearish Engulfing is a two bar bearish reversal pattern and develops after an up leg. The first bar has a small real body and is followed by a second bearish bar with a red real body that completely engulfs the previous bar's range.

Practical Use:

Technical analysts will often use the Bearish Engulfing candlestick pattern as a selling opportunity when in context of another bearish chart pattern.