WEBVTT 00:02.730 --> 00:06.510 In this video, we're going to take a look at the hammer and the hanging man patterns. 00:08.130 --> 00:10.290 These candlesticks look the same. 00:10.380 --> 00:21.270 Basically, they look like this or they can look like this with a small body, but the commonality is 00:21.270 --> 00:24.270 short top with, longer bottom with. 00:25.230 --> 00:26.040 Looks like a. 00:27.070 --> 00:30.310 Mallott on a handle, so therefore it's called a hammer. 00:30.730 --> 00:36.470 It's called a hanging man because they say that when that forms, it is a very grave sign. 00:36.490 --> 00:36.910 So. 00:39.160 --> 00:41.380 The difference between the two is where they're placed. 00:42.400 --> 00:48.400 A hammer is at the bottom of a downtrend, a hanging man is at the top of an uptrend. 00:51.090 --> 00:51.690 The. 00:52.950 --> 00:55.330 Inner workings of what's going on is what's important. 00:55.590 --> 01:00.510 You'll notice that the sellers gain a lot of strength during the day or the hour or whatever you're 01:00.510 --> 01:05.190 trading, but then the buyers come in and support the market. 01:05.340 --> 01:07.710 This shows that the sellers are running out of strength. 01:09.440 --> 01:15.350 And this could be a bullish sign at the bottom of a downtrend, however, at the top of an uptrend, 01:15.350 --> 01:17.630 there's a few special rules, so. 01:18.600 --> 01:21.200 Let's take a look and I'll kind of show you what I'm thinking here. 01:22.730 --> 01:25.970 This is a hammer, this is a downtrend. 01:27.080 --> 01:30.780 And you can see that they tried to push lower but failed. 01:31.130 --> 01:36.710 So when you break above the top of the hammer, think about all of the sellers during that hour. 01:37.310 --> 01:38.890 You know, now the price has gotten above it. 01:38.900 --> 01:44.320 Well, they're all losing money and they need to buy the market to flatten their position out. 01:44.330 --> 01:50.720 So essentially, in this case and Litecoin, you're taking a look at where are all the traders position 01:51.290 --> 01:53.000 and what are the wrong ones doing? 01:53.000 --> 01:54.710 Well, the wrong ones are covering their buying. 01:54.710 --> 01:56.390 So price went higher. 01:58.500 --> 02:06.090 Notice how this one formed, but it didn't get broken above and therefore it wasn't a signal. 02:06.570 --> 02:15.120 But also notice how the hammer here, they got broken above, ended up being retested and then we rallied 02:15.120 --> 02:16.180 towards this area. 02:16.710 --> 02:18.540 So that's classic behavior. 02:19.450 --> 02:24.490 So this is the hammer in question for the light coin market, remember, this one had formed, but it 02:24.490 --> 02:28.910 didn't get broken to the upside, so it never really kicked the signal off, so to speak. 02:29.710 --> 02:35.590 So the first thing you look for ninety nine point ninety nine percent of the time is doesn't make sense 02:35.590 --> 02:38.680 that this candlestick pattern has occurred where it has. 02:40.350 --> 02:42.330 I'll move this down to the mid century mark. 02:43.740 --> 02:47.400 Thirty six fifty and you can see that there was an explosive move to the upside there. 02:47.400 --> 02:49.800 So obviously there are going to be a lot of orders there. 02:50.430 --> 02:51.690 So that makes sense. 02:52.020 --> 02:56.760 You can also see that there was a lot of volume here as well, but we could not break down. 02:56.760 --> 03:00.000 So that makes sense that we might be running out of momentum. 03:01.550 --> 03:03.350 Let's go ahead and put. 03:06.100 --> 03:07.150 Lamarckian, Deon. 03:09.610 --> 03:17.410 And you can see that at this hammer we had extremes and shortly thereafter we got the cross which kicked 03:17.410 --> 03:18.430 off the trade. 03:22.010 --> 03:27.320 You can also, in this particular instance, look at. 03:29.030 --> 03:30.890 A set of estimates, for example. 03:32.430 --> 03:35.010 And you can see that the. 03:43.930 --> 03:50.310 Candlesticks had been spreading, right, but notice how there are the moving averages had been spreading, 03:50.590 --> 03:53.310 but notice how we slammed right into this moving average. 03:53.740 --> 03:56.500 Now, that could have been your initial target. 03:56.740 --> 04:03.670 The reality is, though, and this is important to note about moving averages, support resistance matters 04:03.670 --> 04:04.330 much more. 04:05.110 --> 04:11.260 So as we pulled back there and then we formed this other hammer that shows you that the market is OK 04:11.260 --> 04:12.160 with testing this. 04:12.610 --> 04:15.860 So that would have given you a little bit more confidence going forward. 04:16.600 --> 04:23.550 Again, this is a pretty pretty significant candlestick at pretty significant level. 04:23.980 --> 04:28.880 And as I zoom out even further, you can see just how significant it was. 04:28.930 --> 04:35.380 So in those cases, you have to be a little bit flexible on how you use these indicators. 04:35.380 --> 04:39.080 But without a doubt, the support resistance, by far the biggest thing. 04:39.700 --> 04:40.750 So here. 04:42.070 --> 04:44.680 A hanging man is right here. 04:44.720 --> 04:50.740 Now, those of you who are particularly astute may go, well, that looks like a dragonfly. 04:52.060 --> 04:54.870 Well, they're really kind of the same thing. 04:54.880 --> 04:56.500 There really isn't a huge difference. 04:57.070 --> 05:01.180 It is traded the same way here in the sense that we're in an uptrend. 05:01.180 --> 05:03.910 We pull back, we rally, and then we break down. 05:03.910 --> 05:07.650 And that is the first sign of support breaking and we went much lower. 05:08.230 --> 05:10.930 You can also make an argument for that being a hanging man. 05:10.930 --> 05:13.530 After a quick bounce, we broke down below the bottom of it. 05:13.540 --> 05:16.540 The buyers lost momentum again, stop loss. 05:16.540 --> 05:20.080 Give us on the other side of the candlesticks pretty straightforward. 05:21.490 --> 05:26.800 This is Hlinka, right, in an area that's caused some resistance in the past, you know, we pulled 05:26.800 --> 05:30.000 back and then we ended up forming that hourly hanging man. 05:30.640 --> 05:32.980 You can also take a look at. 05:35.700 --> 05:40.740 The Makdisi, this looks like something that would have suggested that there's probably some momentum 05:40.740 --> 05:41.460 problems here. 05:41.490 --> 05:43.440 Yeah, you can see we crossed right there. 05:44.380 --> 05:50.560 And then rolled over pretty straightforward, and if that didn't convince you that obviously the very 05:50.560 --> 05:56.760 bearish candlestick that was next certainly should have at that point. 05:57.520 --> 06:04.240 So in the next video, we're going to take a look at a pattern called three white soldiers and three 06:04.240 --> 06:05.410 black crows.