HANGING MAN CANDLESTICK

Hanging Man Candle looks similar to Hammer Candle. In hanging man candles, opening, closing, and high price are almost the same. Hanging Man Candle has 75-85% lower shadow and 25-15% real body. The hanging man candle is characterized by having a small real body, little or no upper shadow (wick), and a lower shadow at least twice the length of the body.

                        The only difference is that if the stock is in a downtrend, the Hammer candle is formed at the lower level and indicates a bullish reversal, but if the hanging man candle market is bullish & reached resistance, it is formed at the upper level and indicates a coming down, but the hammer candle there is no equal capacity.

                                                            

 

The hanging man candle can only be identified as such once it has formed at the top resistance level of an uptrend. 
A candle may be a red candle or green candle, but a Red candle is more confirmation of downside movement.
 

                                                                  

You can see in the chart, that the market trend is upside & reached the resistance level & a hanging man candle formed at the top level. After bearish hanging man candle selling pressure increased.

Entry setup in the Hanging Man Candle? And what should be his stop-loss target?

In the above chart, you can see that the nature of the stock was going up and after the formation of the upward hanging man candle, on giving the breakdown below that candle, you will create a position to sell in that stock, hanging man candle. The high price of the candle will be the stop loss and 1-2% of that stock's downside should be our target.