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The Hangman

Reliability Rating: low/moderate

The hangman (karakasa, or paper umbrella), consists of a small body (either color) with a very long lower shadow. This pattern is typically found at the top or bottoms of trends. When the pattern occurs at the top of a up trend it is called a hangman (when it is found at the bottom of a down trend it is called a hammer).

The hangman can be either a black or a white candle.



For the most part, daily candlestick reversal patterns are quite subjective with the exception of the "long-legged shadows' Doji" and the "hangman and hammer" which are more commonly used and provide more significance to the trader.

Source(s):

http://www.chartfilter.com/index.php? option=com_content&view=article&id=108&Itemid=81

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The hangman candle has a very long shadow and a very small real body. Typically, it has no upper shadow (or at the very most, an extremely small one). To be an official hangman, the lower shadow must be at least twice the height of the real body. The larger the lower shadow, the more significant the candle becomes.

The hangman candle -- so named because it looks like a person who has been executed with legs swinging underneath -- always appears after an extended uptrend. The hangman occurs when traders, after seeing a sell-off, rush in to snap up stocks at bargain prices. To their dismay, they often subsequently find that stocks could have been bought at much cheaper levels.

Recognition of the hangman candlestick should be an integral part of all traders' visual identification skills. When combined with moving averages and indicators, this candle can warn of an important trend reversal.

Source(s):

http://www.investinganswers.com/term/hangman- candlestick-988

The hangman (karakasa, or paper umbrella), consists of a small body (either color) with a very long lower shadow. This pattern is typically found at the top or bottoms of trends. When the pattern occurs at the top of a up trend it is called a hangman (when it is found at the bottom of a down trend it is called a hammer).

Why It Matters: Recognition of the hangman candlestick should be an integral part of all traders' visual identification skills. When combined with moving averages and indicators, this candle can warn of an important trend reversal.

What It Is: The hangman candle has a very long shadow and a very small real body. Typically, it has no upper shadow (or at the very most, an extremely small one). To be an official hangman, the lower shadow must be at least twice the height of the real body. The larger the lower shadow, the more significant the candle becomes. The hangman candle -- so named because it looks like a person who has been executed with legs swinging underneath -- always appears after an extended uptrend. The hangman occurs when traders, after seeing a sell-off, rush in to snap up stocks at bargain prices. To their dismay, they often subsequently find that stocks could have been bought at much cheaper levels.

Hanging man or hangman is a candlestick market reversal pattern which indicates a market reversal. Hangman candlestick occurs at the end of an uptrend and is named because it resembles a man hanging on a rope.

Hanging man candlestick is a small candlestick either white (colorless) or dark (colored). It has no, or very small, upper shadow (indicating highest price of the day) and long lower shadow (indicating lowest price of the day) which often more than double the length of candlestick body. Hangman candlestick pattern is created when there is high selling pressure at opening hours of the day, but bulls have managed to bring back the price near the opening price at the end of the trading day.

Hanging man candlestick formations favor day traders more as they are more easily identified in intraday trading charts. Hangman is considered as a modestly reliable candlestick formation; and the reliability increase with the increase of the length of the lower shadow, with the decrease in length of candlestick body and with the formation of a colored candlestick. Most traders initiate trade after the confirmation of trend reversal, which can be a gap or decrease in price in succeeding day.

Source(s):

http://money.blogdig.net/archives/articles/ September2008/11/ Hanging_Man_or_Hangman_Trading_Pattern.html