Hanging man appear at the top of the rally or during the upward trend. When the buyers are losing the grip in market, and a trend is about to change.
Hanging man candlestick can be of any color, however if it is red, it means strong selling position been made at those levels.
Moreover, hanging man is a bearish candlestick pattern, which tells one should go for shorting when seeing it. Other parameter are same as of hammer. let us see how does it look on charts.
As, clearly visible in the chart(30min) above, after a rally, 3 hanging man candlestick patterns appears on chart, telling a new trend is about to come.
However, the first two candles are green in color, as said until the red hanging man candle appears the bears do not have full control. Red color candle shows the selling pressure is becoming high and the bears are in charge of the situation now.
One thing need to keep in mind is putting the stop-loss and it should be done only after the confirmation from the following candle. A great trade opportunity for day traders. As an investor one can use the same method only the time frame of the charts gets changed.