Key Takeaways
Hanging Man
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.
Always wait for pattern confirmation before entering a trade.
Where This Pattern Appears
Trend context and market position.
Appears at the top of an uptrend, signals bearish reversal.
How to Identify
Small real body at or near the top of the range
Long lower shadow at least twice the body length
Little or no upper shadow
Appears after an uptrend
Confirmation Signals
Trading Strategy
š„ Entry
Enter short on break below the hanging man low with confirmation
š Stop Loss
Place stop above the hanging man high
šÆ Take Profit
Target previous support levels
āļø Risk/Reward
1:2
Common Mistakes to Avoid
Pro Tips
Best Timeframes
Pattern Variations
Educational Disclaimer
This content is for educational purposes only and does not constitute financial or investment advice. Trading involves significant risk and you may lose your capital. Always consult a licensed financial advisor before making investment decisions.
Frequently Asked Questions
Related Learning Resources
Related Patterns
Shooting Star
A small body at the bottom of the candle with a long upper shadow (at least 2x the body). Appears at the top of an uptrend.
Bearish Engulfing
A large bearish candle completely engulfs the previous bullish candle. One of the most reliable bearish reversal patterns.
Dark Cloud Cover
Bearish counterpart to piercing line. Second candle opens above the first high but closes below the midpoint of the first candle.