🔹 Definition: A bearish reversal pattern that appears after an uptrend, signaling a potential trend reversal.
🔹 Structure:
✔️ Small body at the top.
✔️ Long lower wick (at least twice the body size).
✔️ Minimal or no upper wick.
✔️ Closes near or below the open price.
🔹 Formation:
1️⃣ Uptrend is in progress.
2️⃣ Price opens and drops significantly (selling pressure).
3️⃣ Buyers push price back up near the open.
4️⃣ Long lower wick shows sellers tried to drive price down.
🔹 Why It’s Important:
✔️ Bearish reversal signal – buyers losing strength.
✔️ Selling pressure is visible through the long wick.
✔️ Needs confirmation – next candle should break the low.
🔹 Trading Strategy:
✔️ Wait for a bearish confirmation candle.
✔️ Check resistance levels for a stronger signal.
✔️ Stop loss above the Hanging Man’s high.
✔️ Take profit at a support level below.
🔹 Success Rate:
📊 59% accuracy in predicting bearish reversals (Vanderbilt University study).
📌 Have you used this pattern in trading? Share your thoughts! 👇
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