The Hanging Man candlestick has the exact same shape as the Hammer, but it appears at the peak of an uptrend and is the most sophisticated trap in the market.
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🔹 The disastrous confusion about the signal
Many people see a candlestick with a long wick and immediately think
Its strong buying pressure at the bottom and jump into a Long position
But in reality, the price being pushed down so deeply during the session
Shows that selling pressure is starting to rise.
🔸 Weakening signal
Although the closing price still has a long wick
The fact that the bears can push the price down so low proves that the
Bulls no longer have absolute control as before.
🔹 Confirmation is mandatory
This is an extremely risky pattern if you enter a trade immediately.
Therefore, you must wait for the next red candlestick to close lower than the wick of the Hanging Man
To confirm that the buyers have officially given up.
Do you buy when you see the hammer, or do you feel fear when you see it hanging over the top?
This article is for reference only, this is not investment advice. Please read and consider carefully before making a decision.
