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Charting
Hammer & Hanging Man
Two names for the same shape. What separates them is what the market was doing before the candle printed.
NoVo Options Trading · 2026
The hammer and the hanging man are the same candlestick: a small body near the top of the range with a long lower wick (little or no upper wick). The difference is entirely contextual — a hammer appears after a downtrend (potentially bullish), a hanging man after an uptrend (potentially bearish).
What the shape says
The long lower wick means price sold off hard during the session, then buyers stepped in and pushed it back near the open. That rejection of lower prices is the story. After a decline (hammer), it can signal sellers are exhausting. After a rally (hanging man), that same intrasession selling warns that supply is starting to appear.
Why confirmation matters
Neither pattern is a signal on its own — both need the next candle to confirm. A hammer followed by a strong up-close confirms buyers took control; a hanging man followed by a down-close confirms sellers did. Acting on the raw candle without confirmation is how traders get faked out by a wick that means nothing.
The wick shows a rejection. The next candle tells you whether anyone followed through.
The disciplined read
These candles matter most at meaningful levels — a hammer at prior-day support or VWAP is a real tell; the same shape mid-range is noise. Like every pattern, it's a hypothesis about who's winning the auction, not a guarantee. Confirm it against structure before it means anything actionable.
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NoVo is a software tool for market analysis and for executing trades you initiate, not financial advice. This article is general education, not investment advice. Options trading involves substantial risk of loss, up to and including your entire capital. NoVo makes no guarantee of profit, win rate, or performance, and past results do not predict future outcomes. You are responsible for your own broker account, configuration, and trading decisions.