To see the
performance of the pattern in your stock exchange in the context of
other stock markets please examine the table below. Find your stock
market there and see how it ranks among the others. This will give you
an idea about the pattern’s strength and reliability and help you in
your selling decisions.
BEARISH HANGING MAN
Definition
The pattern
occurs at the top of a trend or during an uptrend. The name Hanging Man
comes from the fact that the candlestick looks somewhat like a hanging
man. It is a single candlestick pattern that has a long lower shadow and
a small body at or very near the top of its daily trading range.
Recognition Criteria
1. The market is characterized by a prevailing uptrend.
2. A small real body at the upper end of the trading range is observed. The color of the body is not important.
3. The lower shadow of this candlestick is at least twice as long as the body.
4. There is (almost) no upper shadow.
2. A small real body at the upper end of the trading range is observed. The color of the body is not important.
3. The lower shadow of this candlestick is at least twice as long as the body.
4. There is (almost) no upper shadow.
Pattern Requirements and Flexibility
The body of
the Hanging Man should be small. The lower shadow should be at least
twice as long as the body, but not shorter than an average candlestick.
It is desired that the upper shadow is very small, or better nil. The
top of the Hanging Man’s body should be above both of the two preceding
white candlesticks.
Trader’s Behavior
The Hanging
Man is a bearish reversal pattern. It signals a market top or a
resistance level. Since it is seen after an advance, it signals that
selling pressure is starting to increase. The long lower shadow
indicates that the sellers pushed prices lower during the session. Even
though the bulls regained their footing and drove prices higher by the
finish, the appearance of this selling pressure after a rally is a
serious warning signal. If the body is black, it shows that the close
was not able to get back to the opening price level, which has
potentially more bearish implications.
Sell/Stop Loss Levels
The
confirmation level is defined as the midpoint of Hanging Man’s lower
shadow. Prices should cross below this level for confirmation.
The stop loss level is defined as the higher of the last two highs. Following the bearish signal, if prices go up instead of going down, and close or make two consecutive daily highs above the stop loss level, while no bullish pattern is detected, then the stop loss is triggered.
The stop loss level is defined as the higher of the last two highs. Following the bearish signal, if prices go up instead of going down, and close or make two consecutive daily highs above the stop loss level, while no bullish pattern is detected, then the stop loss is triggered.
Di plekdr alamat: http://www.candlesticker.com/Pattern.aspx?lang=en&Pattern=1201
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