Definition
Hanging Man looks exactly like a hammer but forms at the top of uptrends. The long lower shadow shows selling pressure emerged despite the close near the high. It warns that bulls may be losing control. Confirmation from the next candle is important.
Formula
Lower Shadow ≥ 2 × Real Body; Appears after uptrend
Example
After an uptrend to $60, stock opens at $60, drops to $55, rallies to close at $59. Despite closing near the high, the drop shows sellers emerging.
FAQ
What is Hanging Man?
A bearish reversal pattern identical to hammer but appearing after an uptrend.
How do you calculate Hanging Man?
A common formula for Hanging Man is: Lower Shadow ≥ 2 × Real Body; Appears after uptrend
Why is Hanging Man important?
Hanging Man helps investors evaluate candlestick patterns and make more informed decisions.