Hanging Man Candlestick as Reversal Pattern in Stocks
Hanging Man Candlestick Pattern
The Hanging Man Candlestick Pattern indicates a potential bearish reversal that occurs during an upward price trend, resembling a figure hanging by a noose.
A hanging man candlestick pattern has:
- A small body
- The body is at the top
- The lower shadow is 2 or 3 times the length of real body.
- Has no upper shadow or has a very small upper shadow if present.
- The color of the body isn't important
How to effectively trade the Hanging Man candlestick pattern and analyze its formation.
Analysis of Hanging Man Candlesticks Patterns
The sell signal is confirmed when a bearish candlestick closes lower than the opening price of the candlestick to the left of the hanging man candle pattern.
Stop Loss orders should be set a few pips above the high of the hanging man candle pattern setup.
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