Candlesticks Trading Hanging Man
Characteristics
1. The upper shadow should be at least two times the length of the real body.
2. The real body is at the upper end of the trading range. The color of the body is not important although a Red body should have slightly more bearish implications.
3. There should be no upper shadow or very small upper shadow.
4. The longer the lower shadow, the higher the potential of a trend reversal occurring.
Trading Psychology
1. After a strong upward trend the buyers cease their intensity and the sellers begin to enter. Feelings begin to turn bullish.
2. Price opens higher begins to move lower. The bears have overcome the bulls control but the bulls take it back. This could indicate that the bulls still have control
3. The long lower shadow indicates that sellers started stepping in at these levels. Even though the bulls may have been greater. A lower open or another red candle reinforces the fact that selling is becoming the trend.
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