Hanging man candlestick definition

A hanging man candlestick is a single-candle pattern that can signal a bearish reversal after a price rise. It shows sellers driving the price down during the session, even though buyers recover part of the move before the close.

A hanging man has a small real body near the top of the candle and a long lower wick. The long lower wick reflects intraday selling, while the body near the top shows the close near the open.

A hanging man and a hammer look identical, so the trend before them decides the reading. A hanging man forms after an uptrend and warns of weakness; a hammer forms after a downtrend and hints at a bottom. The signal firms up near resistance when the next candle closes lower or volume rises.

Hanging man candlestick Example

A stock CFD rises from USD 40 to USD 50 over several sessions.

At the top, it drops to USD 47 during the session but closes near USD 49.80. The candle has a small body and a long lower wick.

This is a hanging man, and you wait for the next candle to close lower as bearish confirmation before acting.