HANGING MAN

The Hanging Man is a candlestick pattern that appears at the end of an uptrend and suggests that the market may start moving downwards. It looks like a hammer and is considered a bearish reversal signal.

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The Hanging Man and Hammer Candlestick patterns are similar, but the Hammer forms during a downtrend, while the Hanging Man forms during an uptrend.

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The Hammer candlestick forms when the market is going down, but traders aggressively buy at the open and sell aggressively, causing the price to drop before rallying back up and closing near the top.

The long lower shadow indicates that the bears (sellers) pushed the price down during the period, but the bulls (buyers) managed to push the price back up, suggesting a potential reversal in the trend.
Advantages
- Hanging Man candles are seen at the top of an uptrend
- Shadows (wicks) are ideally 2-3 times the size of the body
- The color of the body does not matter
- A Hanging Man candle fails when the market achieves a new high in the next candle
- The top or close of the Hanging Man candle can be considered as a resistance line
- Hanging Man candles do not provide a price target, but they suggest that traders may be interested in going against the uptrend, signaling a potential trend reversal
- Hanging Man candles always indicate a reversal and exit signal for investors to close out their long positions

Confirmation from the next candlestick is necessary before entering a trade based on these patterns, which means traders need to be patient and wait for confirmation, potentially missing out on some opportunities.

Example-1 : Hanging Man

Example-2 : Hanging Man and Hammer Candles

Example-3 : Hanging Man with breakdown confirmation

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Example-1 : Hanging Man

Example-2 : Hanging Man and Hammer Candles

Example-3 : Hanging Man with breakdown confirmation

Example-4 : Hanging Man fails as stoploss hits and again re-entry to put/short the market

Example-5 : Hanging Man with support and resistance

Example-6 : Hanging Man with Entry, exit and stoploss points and making High volume

Example-7 : Hanging Man with ascending channel

Example-8 : Formation of Hanging Man at high resistance zone

Example-9 : Hammer Candle vs Hanging Man

Example-10 : Hanging Man with confirmation signal

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