Hanging Man


The Hanged Man is the twelfth trump or Major Arcana card in most traditional Tarot decks. It is used in game playing as well as in divination.

Hanging Man

What is a ‘Hanging Man’

A hanging man is a bearish candlestick pattern that forms at the end of an uptrend. It is created when there is a significant sell-off near the market open, but buyers are able to push this stock back up so that it closes at or near the opening price. Generally, the large sell-off is seen as an early indication that the bulls (buyers) are losing control and demand for the asset is waning.

Explaining ‘Hanging Man’

The hanging man formation does not mean that the bulls have definitively lost control, but it may be an early sign that the momentum is decreasing and the direction of the asset may be getting ready to change. Hanging man formations can be more easily identified in intraday charts than daily charts and are a very popular formation used by day traders. If this pattern is found at the end of a downtrend, it is known as a “hammer”.

Anatomy of a Hanging Man Candlestick

The candle should have a small body near or at the top of the candle and a large tail or lower shadow that should be at least twice the size of the body. The candle color can be green or red. A red candle close is considered more bearish. The more important detail is the context of the preceding candles leading up to the hanging man and the candles afterward.

Bearish Hanging Man

Typically considered a bearish candlestick, an ideal scenario would be preceding series of at least three or more bullish green candles with higher highs. In the aforementioned structure with a small body and long tail, the hanging man candle should form at the top. The next candle needs to close under the body low, preferably at or below the tail.

Further Reading

  • Theories of Social Preferences Beyond Homo Economicus: A Review Based on the Experimental Economics [J] – en.cnki.com.cn [PDF]
  • Environmental Risks and Green Finance [J] – en.cnki.com.cn [PDF]
  • Analysis on Hanging on to Pooling of Interest Method – en.cnki.com.cn [PDF]
  • The Hanging Man: Death, indeterminacy and the event – www.tandfonline.com [PDF]
  • Efficiency and Justice: A dialogue between economics and law [J] – en.cnki.com.cn [PDF]
  • Analysis of Liu Gongyun's Financial Practice during the Period of Republic of China – en.cnki.com.cn [PDF]