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Glossary · Candlestick patterns

Hanging man

A bearish warning candle at the top of an uptrend, shaped like a hammer: a small body near the high and a long lower wick.

By Sky Trade editorial teamUpdated

The hanging man has exactly the same shape as a hammer — small body at the top, long lower wick — but it appears after a rise, and that location changes its meaning. The long lower wick shows sellers managed to push price down sharply during the period. Buyers recovered by the close, but the attempt suggests selling pressure is starting to appear.

It is considered a weaker signal than the hammer and more dependent on confirmation. On its own, a hanging man in an uptrend is often followed by further gains. The usual confirmation is a next candle that closes below the hanging man's body.

Things that make the pattern more worth noticing:

  • a clear prior uptrend;
  • a location at resistance or a round number;
  • a bearish body (close below open), although opinions differ on how much that matters.

The main mistake is selling every hammer-shaped candle in an uptrend: there are many of them, and most don't end the trend. Treat the hanging man as a reason to be careful with new Higher trades rather than as a Lower signal by itself. See hammer and hanging man and reversal pattern.

Example

After rising from 1.2600 to 1.2690, GBP/USD prints an M15 candle with a 3-pip body at the top and a 14-pip lower wick. The next candle closes at 1.2672, below that body, confirming the warning.

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