Bearish confirmation for hanging man is gap down next day.Hanging Man type of price action only shows that the market starts to sell off, it has become vulnerable to a fast break. Wait for bearish confirmation with the hanging man.
Although the real body of the hammer or hanging man can be white or black, it is slightly more bullish if the real body of the hammer is white.The longer the lower shadow, the shorter the upper shadow and the smaller the real body the more meaningful the bullish hammer or bearish hanging man.It should have no, or a very short, upper shadow.A long lower shadow should be twice the height of the real body.The color of the real body is not important. The real body is at the upper end of the trading range.1) The hammer and hanging man can be recognized by three criteria:
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