How to Use Hanging Man Candlestick Pattern to Trade Trend Reversal

In technical analysis, the Hanging Man candle is a reversal candlestick pattern that appears at the top of a bullish trend and indicates a price reversal. Most price action traders use this pattern to identify the most reliable point to open a sell trade.

Candlestick chart trading has become popular in the cryptocurrency market. Moreover, its effectiveness helps traders find profitable trades in any financial market. Candlestick-based trading started in the stock market, but it has become effective with forex and cryptocurrencies as well. Therefore, modern cryptocurrency brokers use candlestick charts that make investing in crypto assets more profitable. 

The Hanging Man candlestick pattern provides similar price action as other formations, such as Hammer, Doji, and Shooting Star. However, it appears at the top of an upward trend and provides a possible bearish trend direction. Now, let’s get down to the nuts and bolts of the Hanging Man pattern in the cryptocurrency market.