Hanging Man


DEFINITION of 'Hanging Man'

A bearish candlestick pattern that forms at the end of an uptrend. It is created when there is a significant sell-off near the market open, but buyers are able to push this stock back up so that it closes at or near the opening price. Generally the large sell-off is seen as an early indication that the bulls (buyers) are losing control and demand for the asset is waning.

Hanging Man


This formation does not mean that the bulls have definitively lost control, but it may be an early sign that the momentum is decreasing and the direction of the asset may be getting ready to change. The reliability of this signal is drastically improved when the price of the asset decreases the day after the signal. Hanging man formations can be more easily identified in intraday charts than daily charts and are a very popular formation used by day traders.

If this pattern is found at the end of a downtrend, it is known as a "hammer".

  1. Intraday

    Another way of saying "within the day". Intraday price movements ...
  2. Day Trader

    A investor who attempts to profit by making rapid trades intraday. ...
  3. Bear

    An investor who believes that a particular security or market ...
  4. Hammer

    A price pattern in candlestick charting that occurs when a security ...
  5. Pattern

    In technical analysis, the distinctive formation created by the ...
  6. Bull

    An investor who thinks the market, a specific security or an ...
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    Some of the best technical indicators to complement use of the STARC bands are other oscillators or momentum indicators and ... Read Full Answer >>
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  3. What is the difference between a Hanging Man and a Hammer Pattern?

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  4. How are Hanging Man patterns interpreted by analysts and traders?

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