The Hanged man
The "Hanged Man" candlestick formation appears in an uptrend, and signals its imminent change to a downtrend.
This candlestick, has a small short body and a long lower shadow. There should be no upper shadow at all, or it should be very short. The colour of the candle does not play a special role, but on small timeframes, the model with a red candle will be stronger.
The candlestick formation "Hanged Man" can be identified by three main features:
1. The body is at the top of the price range. The colour of the body does not matter.
2. The lower shadow is twice as long as the body.
3. The candle has no upper shadow or it is very short.
Also, be sure to wait for a bearish confirmation candle.
A pair of "Hanged Man", is a candlestick pattern known as "Inverted Hammer". The point of this Japanese candlestick pattern is, on the contrary, to buy, as it is formed during a downtrend, indicating that it will soon change to an uptrend.