P
PipsGrowth

Key Takeaways

Success Rate:52%
Difficulty:Beginner
Strength:
R:R Ratio:1:2
🔻

Hanging Man

bearish reversalModerate Reliability1 Candle

Same shape as hammer but appears at the top of an uptrend. Small body with long lower shadow indicates potential bearish reversal.

Market Psychology

Despite recovery from lows, the fact that price dropped significantly during the session shows sellers are present.

Candle Structure

Trading Setup Example

Entry, stop loss, and take profit levels.

How to Trade the Hanging Man PatternTake Profit📥 EntryStop LossPatternConfirmEnterSELLPatternConfirmEnterSL/TP

Always wait for pattern confirmation before entering a trade.

Where This Pattern Appears

Trend context and market position.

UptrendHanging ManReversal ↓

Appears at the top of an uptrend, signals bearish reversal.

How to Identify

1

Small real body at or near the top of the range

2

Long lower shadow at least twice the body length

3

Little or no upper shadow

4

Appears after an uptrend

Confirmation Signals

RSI overbought (>70)
At key resistance
Volume spike
Bearish next candle

Trading Strategy

📥 Entry

Enter short on break below the hanging man low with confirmation

🛑 Stop Loss

Place stop above the hanging man high

🎯 Take Profit

Target previous support levels

⚖️ Risk/Reward

1:2

Common Mistakes to Avoid

Trading without prior uptrend
Not waiting for confirmation
Ignoring volume
Fighting strong trend

Pro Tips

💡Needs bearish confirmation more than shooting star
💡Bearish body (red) is slightly more reliable
💡Watch for gap down on next candle as strong confirmation

Best Timeframes

4HDaily

Pattern Variations

At resistance level (stronger)
With gap open
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Frequently Asked Questions