Beginner2 min readLast updated: 2026-06-10
Hanging Man Pattern — Complete Guide
Master the Hanging Man — a bearish reversal warning at the top of uptrends. Learn identification and trading strategies.
What is the Hanging Man?
The Hanging Man looks identical to a Hammer but appears at the top of an uptrend. Same shape, opposite meaning — it warns of potential bearish reversal.
Identification
| Rule | Requirement |
|---|---|
| Shape | Same as Hammer (small body top, long lower wick) |
| Location | MUST be at the top of an uptrend |
| Signal | Bearish warning (buyers losing grip) |
| Confirmation | Requires bearish candle next to confirm |
Psychology
- During an uptrend, price opens and sells off significantly
- Buyers recover price back to the open
- BUT the selloff itself is a warning — sellers are becoming active
- If next candle confirms bearish, the reversal is likely
Trading Rules
- Never trade the Hanging Man alone — must confirm next candle
- Entry: Below Hanging Man's low after bearish confirmation
- Stop: Above the Hanging Man's high
- Target: Next support level
- Best when combined with resistance, divergence, or exhaustion
Hanging Man vs. Hammer
| Feature | Hammer | Hanging Man |
|---|---|---|
| Shape | Same | Same |
| Location | Bottom (support) | Top (resistance) |
| Signal | Bullish | Bearish |
| Reliability | High | Moderate (needs confirmation) |