The Hanging Man is visually identical to the Hammer — small body near the top, long lower wick (2x+), little to no upper wick. The critical difference is context: it appears at the top of an uptrend, where the same shape becomes a warning of potential reversal.

How to Identify

• Appears after a sustained uptrend
• Small real body in the upper portion of the candle's range
• Lower wick is 2x–3x the body length
• Little or no upper shadow
• Weakest of the single-candle bearish signals — requires strong confirmation

Market Psychology

During an uptrend, sellers push price sharply lower intraday (the long lower wick) but bulls fight back to recover near the opening by close. While bulls technically won the session, the strong intraday selling pressure is a warning sign — distribution is beginning at elevated prices.