The hanging man has the same shape as a hammer (long lower shadow, small body) but appears at uptrend peaks. The same shape carries different meaning by location: a long lower shadow at highs shows bulls briefly lost control — a topping warning.
A sign of instability at the top. Although price recovered, the session saw a sharp drop, indicating active selling at the highs. Medium signal strength; needs next-day confirmation.
Medium signal (win rate 59%). Wait for a bearish confirming candle next day that closes below the hanging man's body before entering short. Stop-loss above the hanging man's high.
Must appear after a clear uptrend. A bearish (black) body is slightly stronger. Volume expansion increases reliability.