🔥🔥HANGING MAN CANDLESTICK 🔥🔥
The Hanging Man candlestick pattern is a bearish reversal pattern that appears at the top of an uptrend ¹ ² ³ ⁴:
✍️✍️✍️ Key points to consider:
👉 The Hanging Man occurs during an uptrend and warns that prices may start falling.
👉 The candle is composed of a small real body, a long lower shadow, and little or no upper shadow.
👉 The hanging man shows that selling interest is starting to increase.
👉 For the pattern to be valid, the candle following the hanging man must see the price of the asset decline.
👉 The long lower shadow of the hanging man shows that sellers were able to take control for part of the trading period.
👉 The hanging man pattern is just a warning. The price must move lower on the next candle in order for the hanging man to be a valid reversal pattern. This is called confirmation.
👉 Traders typically exit long trades or enter short trades during or after the confirmation candle, not before.
👉 The hanging man and the hammer candlesticks look identical. The only difference is the context. The hammer is a bottoming pattern that forms after a price decline, while the hanging man occurs after a price advance.