Candlesticks / Hanging Man In An Uptrend

[hagadol]

I am trying to figure out when a "Hanging Man" is a reversal (end of trend signal) in an up trend and when it is not and the reasoning behind each set up.

Any ideas ?

I have been reading various books / web sites on this and am still not 100% sure on this.

 

[barjon]

hagadol

a hanging man might indicate a reversal but you need confirmation ie: a lower opening the next day (the greater the gap the more likely it's a reversal) or a down session with a lower close the next day.

the reasoning is that on the hanging man day the market has opened near its highs, sold off sharply, the rallied to close near the highs. a gap down the next day leaves those who bought near open or close of hanging man day "hanging" in a losing position

 

[Uncle]

Never rely on one indicator alone to make a decision..........you should always look for confirmation before placing a trade, be it one or more other indicators, gaps (as mentioned above), crossing of trend lines, support and resistance, or whatever else you may have decided on to establish a position.

AND ABOVE ALL PLACE A STOP !!!!

John

 

[culion]

I am trying to figure out when a "Hanging Man" is a reversal (end of trend signal) in an up trend and when it is not and the reasoning behind each set up.

Any ideas ?

I have been reading various books / web sites on this and am still not 100% sure on this.

Single bar candlestick patterns are not as reliable as multiple bar patterns. Norris's "Candlestick Charting Explained" has some useful statistics. And as Uncle noted, don't use any technique in a vacuum.