In the trading world, it's not enough to just chase prices — you must watch the behavior! This is where the importance of the Hanging Man candle comes in, which is one of the most famous Japanese candles that signals a potential reversal of the bullish trend and warns of a possible upcoming decline.
The overall shape of the candle:
Small body (top of the candle).
Long lower shadow (at least twice the length of the body).
Upper shadow is either very short or nonexistent.
Often appears after a series of bullish candles.
What does it mean?
The Hanging Man candle indicates that buyers are still trying to push the price higher, but sellers have started to appear strongly within the session, increasing the likelihood of a trend reversal.
Is it sufficient to enter a sell trade?
No. Like most reversal candles, the Hanging Man candle should not be relied upon alone. It is better to wait for confirmation in the next candle (such as a strong red candle or a break of nearby support), or combine it with other technical indicators like RSI or moving averages.
Practical Example:
Imagine a stock that has risen for several sessions, then a Hanging Man candle appears — this serves as a warning: has the momentum ended? Have the big players started to liquidate? Close monitoring afterward might open an excellent selling opportunity.
#candlestick #Learn #LearnTogether #LearnFromMistakes #learn2earn
