Candlesticks - Vol 6 - Hanging Man
Type: Reversal PatternAppearance: Opening price and closing prices are both at or very near the high price of the bar, with a much lower daily intra-candle low.
Typical Duration: 1 bar/candle
Description: The reasoning behind this pattern is that despite the high closing price, it is one of the first signs of buying interest starting to dry up, with sellers managing to make a significant intra-candle low before being overpowered by buyers.
- Rising trend - the hanging man is only valid after a significant up trend in price.
- The daily open, high, and close must be equal or nearly equal. By their very definition.
- The hanging man pattern is confirmed more definitely if price moves down the following bar.
How to Trade It:
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