What is Forex and how does it work?
27 November 2015
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- theforexscalper
theforexscalper
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Learn everything about Orderflow trading?
theforexscalper
Email us now :
info@theforexscalpers.com
The Hanging Man Forex is a Bearish candlestick pattern at the end of an uptrend.
Mostly appears whenever there is a significant sell-off close to the markets high. However, buyers are capable to lift the pairs price up again so it closes nearby the opening level. Mostly a sell-off as seen as loss of territory for the Bulls. It shows weakness.
As I said before, the Hanging man Forex is Bearish when occurs after an important uptrend. I hear you thinking. This patterns can easily occur after a downtrend as well right? The anser is yes indeed. However, when that happens it’s called a Hammer. Recognized by small red bodies (small margin between open and close prices) and long lower shadows (the lowest is significantly lower as the open high and close).
The Hanging man has no or almost no upper shadow and a lower shadow at least twice as long as the body of the candle. The lower half of the candles shadow will give is the pressure of selling. A terrific Price Action trade setup is when the formation is set at a Resistance level.
Step 1 is marking the Hanging man candlestick formation with your rectangle tool. Be sure that you are at your highest level of accuracy here. Draw from the top shadow to the lower shadow and stretch the rectangle a little to the right (so you give the price a little space to play).
In the example below we see a weekly Hanging man.
Once emphasized the Hanging man candlestick you move on to the daily time frame. In this example the Hanging man was spotted at the weekly chart. As shown below at the daily chart, we have zoomed in to have a better view at the price action.
We’ve just waited for the momentum to change, the Resistance stood ground and the trend has reversed.
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Welcome to my author blog. With over 12 years of experience in the financial markets, Trading is more than a profession for me; it's a passion that has fueled my curiosity and determination. Over the years, I've explored various trading strategies, dabbled in different asset classes, and navigated through the ever-evolving landscape of technology and innovation. Through it all, I've witnessed firsthand the transformation of the financial industry. My mission is to share the wealth of knowledge I've gained over the years with you, my fellow traders and aspiring investors. Whether you're a seasoned pro looking for fresh perspectives or a newcomer eager to understand the basics, you'll find something valuable here.
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