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What Happens in Trade after a Hanging Man Candlestick Sticks Setup?

The Hanging Man candlestick configuration is a potential bearish reversal signal that manifests during an uptrend. It earns its name because its appearance resembles a figure suspended from a rope high above.

A hanging man candle has:

  • A small body
  • The body is at the top
  • The lower shadow is 2 or 3 times length of real body.
  • Has no upper shadow or very small upper shadow if present.
  • The color of the body isn't important

After a Hanging Man Candle: What Happens Next in the Market?

What Happens in Trade after a Hanging Man Candles Pattern?

Technical Analysis of the Hanging Man Candles

The signal to sell because things are going down is confirmed when a down candle closes under where the candlestick opened on the left of the hanging man candle setup.

After a xauusd trader initiates a trade based on this candlestick setup, a few pips should be placed just above the high of the hanging man candle to set a stop loss order.

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