Categories: Forex Glossary
The Hanging Man candlestick pattern is a bearish reversal pattern. Just like its name, the candlestick looks like a hanging man. It is characterized by a small real body near the high of the candle. The real body can be black or white, although a black candlestick is preferable. It has a long lower shadow that should be at least twice the length of the real body. The upper shadow should be very small or non-existent.
This pattern occurs mainly at the top of an uptrend and is a warning of a potential reversal. The Hanging Man is an early sign that the momentum is decreasing and the direction of the price may be getting ready to change.
