The Hanging Man Signal

Learning how the stock market works for novices is a difficult process. The first  thing an investor should learn is the basics of why prices move.  Unfortunately, the new investor can be overwhelmed with stock trading advice.  Most of that advice does not teach an investor how to  utilize human emotions.  The candlestick signals, especially the 12 major signals, involve the visual elements produced by human emotions.  Being able to correctly analyze what these emotions are doing at specific points of a trend becomes a valuable tool for successful investing Learning how the stock market works for novices is an endeavor that most investors never master.  Learning how the stock market works for novices involves controlling one’s emotions.  Candlestick signals are a great benefit for the beginning investor as well as the experienced trader.  The information conveyed in the major candlestick signals is the visual depiction of investor sentiment.  Most investors sentiment unfortunately involves the extremes of human emotions, fear and greed. Learning how the stock market works for novices is an educational process.

The information incorporated into a major candlestick signal provides a huge advantage for those investors just learning how to play the stock market. Learning how the stock market works for novices should be made is simple as possible.  The results of simple visual analysis permits an investor to take advantage of high probability situations.  The major signals are created by the aspects of human emotions being put into trading decisions.  Investor psychology produces reoccurring thought processes as investors go through different stresses of a price trend.  The 12 major signals are a very important tool when learning how to play the stock market.  Understanding the investment psychology that creates each signal is an important element for understanding how professional investors think. One of the most important facets for learning how a stock market works for novices is knowing how to put the probabilities in your favor.  The candlestick signals create a format that does just that.  Hundreds of years of observations have resulted in reversal signals that are easy to identify.  When learning how the stock market works for novices, it is very important to find indicators that have a high probability of producing profits and a low probability of producing losses. This may be stating the obvious.  However, the utilization of candlestick signals is being done by a very small percentage of the investment population.  Use the major signals to start profiting from your investment decisions immediately.

The Hanging Man  produces some very important attributes when analyzing a potential reversal.  It is considered one of the 12 major signals.  Learn how to use a Hanging Man signal correctly. The probabilities of being in a correct trade when utilizing this signal becomes extremely high.

Hanging Man Candlestick Pattern



The Hanging  Man  is also comprised of one candle. It is easily identified by the presence of a small body with a shadow at least two times greater than the body. It is found at the top of an up trend.  The Japanese named this pattern because it looks like a head with the feet dangling down.


  1. The upper shadow should be at least two times the length of the body.
  2. The real body is at the upper end of the trading range. The color of the body is not important although a black body should have slightly more bearish implications.
  3. There should be no upper shadow or a very small upper shadow.
  4. The following day needs to confirm the Hanging Man signal with a black candle or   better yet, a gap down with a lower close.

Signal Enhancements

  1. The longer the lower shadow, the higher the potential of a reversal occurring.
  2. A gap up from the previous days close sets up for a stronger reversal move provided the day after the Hanging Man signal trades lower.
  3. Large volume on the signal day increases the chances that a blowoff day has occurred although it is not a necessity.

Pattern Psychology

After a strong up-trend has been in effect, the atmosphere is bullish. The price opens higher but starts to move lower. The bears take control. But before the end of the day, the bulls step in and take the price back up to the higher end of the trading range, creating a small body for the day. This could indicate that the bulls still have control if analyzing a Western bar chart. However, the long lower shadow represents that sellers had started stepping in at these levels. Even though the bulls may have been able to keep the price positive by the end of the day, the evidence of the selling was apparent. A lower open or a black candle the next day reinforces the fact that selling is going on.

When identifying the Hanging Man signal under the correct conditions, with stochastics in the overbought conditions, at the top of an uptrend, provides the information needed for identifying the possibility of a trend reversal.  When learning to play the stock market, being able to put all the probabilities in ones favor is very important.  When will an uptrend reverse?  When indications start appearing that demonstrate that the sellers are starting to take control!  The Hanging Man signal provides the elements that indicate the sellers stepping into a trend. Use this information to your advantage.

The educational process for learning to invest correctly is greatly enhanced when utilizing candlestick charts.  The information conveyed in candlestick signals is easily analyzed through candlestick formations.  Learning how to invest in the stock market becomes much easier when it can be visually analyzed. The candlestick patterns portray high probability investment situations. The candlestick investor gains huge advantages by seeing what investor sentiment is doing right now.

Training Tutorials

The Major Signals Educational Package  has over 8 Hours of training for trading Candlestick Signals or The Hanging Man individual training video available for Quick Download.

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