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.
How to trade with Shooting star candle?
What should be the entry point for trade?
Wait for the hanging man pattern to fully formation.
Confirm the pattern with the next candle price action pattern.
You have to enter below the hanging man candle pattern.
What should be stoploss for trade?
Place stop-loss order above the high of the hanging man candle.
Consider market volatility when placing a stop-loss buffer range.
Use proper position sizing to manage risk 1-2% of the total capital.
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