The Yin & Yang of Candlesticks

Everything in the universe has a balance. And the balance is seen in yin and yang.
So does candlestick. To ease our memory of the patterns in candlestick, we need to understand the concept of yin and yang.

Let's take a look at this candle - irregardless of whether it is a black or white candle - is this a hammer or a hanging man?

Without knowing the previous trend, one would not know but to learn this, it is easiest to learn both together. Even Nison grouped them together in his book Japanese Candlestick Charting Techniques.

The hammer and hanging man can be recognized by three criteria:
1. The real body is at the upper end of the trading range. The color of
the real body is not important.
2. A long lower shadow should be twice the height of the real body
3. It should have no, or a very short, upper shadow.

The only difference is one appears on the uptrend, signalling potential downtrend; while the other is the exact opposite - appears on the downtrend signalling potential uptrend.

"What is in a name?" - Shakespeare.
But if you would really want to remember the name, an easy way is visualisation - for example, hanging man - I would visualise that to be hanging, one needs to be on a high position - so hanging man would be hanging on the uptrend, signalling on potential downtrend. Why signal potential downtrend? Well, after being hanged, one would be dead. Kind of obvious isn't it?
And if hanging man and hammer is the exact opposite and one has learnt the hanging man, what would be the hammer? Yeap. the exact opposite. Easy, isn't it?

Now look at the below, what is this - a Shooting Star or an Inverted Hammer?

Again the concept to learn is the same as the above illustration of the Hanging Man and the Hammer.

Hopefully this article would ease one's learning on the Candlesticks. Enjoy!