Community Forex Questions
What are the characteristics of the Hanging Man candle?
The Hanging Man is a bearish candlestick pattern typically seen at the end of an uptrend, signaling a potential reversal. This pattern is easily recognizable due to its unique appearance:

1. Long Lower Shadow: The most distinctive feature of the Hanging Man is its long lower shadow, which should be at least twice the length of the body. This shadow indicates that sellers drove prices significantly lower during the trading period, but buyers managed to push prices back up.

2. Small Real Body: The body of the Hanging Man is small, and it can be either bullish (white or green) or bearish (black or red). The small body shows that despite the selling pressure, buyers were able to regain control, though not decisively.

3. Little or No Upper Shadow: A Hanging Man typically has little to no upper shadow, indicating that the price opened near the high and closed near the open.

4. Position: The Hanging Man must occur after a recognizable uptrend for it to be considered a reversal pattern. Its presence suggests that the uptrend might be losing momentum, and a potential bearish reversal could follow.

However, confirmation through subsequent bearish candlesticks is crucial before traders act on this signal.

Add Comment

Add your comment