Hanging Man
Candlestick PatternsA bearish reversal candlestick with a small body at the top and a long lower wick. It appears at the top of an uptrend and warns that selling pressure is building.
What Is a Hanging Man?
The hanging man forms at the peak of an Uptrend and looks identical to a Hammer: small body near the top, long lower shadow at least twice the body length, and little or no upper wick. The key difference is context. After a sustained rally, this shape signals that sellers briefly took control during the session, foreshadowing a possible reversal.
Reading the Signal
When you see a hanging man on GBP/USD after a multi-day rally, it means the price dropped significantly during the session before buyers recovered it. While the close stayed near the high, that intra-session sell-off reveals vulnerability.
Confirmation is essential. Traders wait for the next candle to close below the hanging man's body. A gap down on the following session provides even stronger confirmation.
Practical Tips
The hanging man works best at Resistance zones, Fibonacci extension levels, or round numbers. Avoid acting on hanging man patterns in the middle of strong momentum moves, as the Trend may simply continue. Pair the signal with volume analysis or an oscillator divergence for better accuracy.
Related Terms
Hammer
A bullish reversal candlestick with a small body at the top and a long lower wick at least twice the body length. It appears at the bottom of a downtrend.
Shooting Star
A bearish reversal candlestick with a small body at the bottom and a long upper wick. It appears at the top of an uptrend, showing that buyers were overwhelmed by sellers.
Evening Star
A three-candle bearish reversal pattern consisting of a large green candle, a small-bodied candle, and a large red candle. It signals the end of an uptrend.
Bearish Engulfing
A two-candle bearish reversal pattern where a large red candle completely engulfs the body of the preceding green candle. It signals strong selling pressure after a rally.