Today's post is about
The "Hanging Man" Candle
Today we have a candle that has a scary name... but don't worry!
The Hanging Man candle is a signal that can help you understand the market better.
🟡What does it mean?
This candle usually appears after an upward trend, indicating that the market might start to reverse and go down.
🟡Its shape: A small body at the top and a long shadow below (like a hanging man, that's why its name is strange).
🟡How do we know if the market will really drop?
1. Check if the candle appeared at a strong resistance.
2. Wait for confirmation after the candle (for example, a strong bearish candle after it).
3. Use an additional indicator like RSI to ensure that the market is indeed in an overbought condition.
🟡Practical Example:
If a Hanging Man candle appears on a recently rising currency that has reached a historical resistance area, this might be a good time to consider selling the currency.
🟡Warning:
Do not rely on the candle alone, as it is not always accurate. Try to use it with other indicators or additional analyses.