I've noticed that many beginners get confused with the candlestick pattern called 'Hanged Man.' Let's figure out what it is and why you should pay attention to it.

The 'Hanged Man' pattern is a bearish reversal signal that usually appears after an upward trend. The name speaks for itself: visually, the candle looks like a figure hanging upside down. This occurs when the candle has a small body and a very long lower wick.

Practically, this means the following. The price opened fairly well, but then sellers took control. They pushed the price down, but by the end of the day, buyers still managed to lift it slightly. As a result, a distinctive shape appears — a small real body and a long tail downward.

When you see a 'Hanged Man' on the chart, it’s a signal that the balance of power has started shifting in favor of the bears. If the candle is red, it strengthens the bearish signal. If green, the mood is less aggressive but still warning.

For traders, this is a moment to consider exiting long positions. Some prefer to close positions after such a pattern, while others prepare for short trades. The main thing is to understand that the 'Hanged Man' often precedes a price decline.

Of course, one pattern alone is not a guarantee. It’s always better to look at the overall context, volume, and other indicators. But if you see this signal at the end of an upward trend, it’s a reason to be cautious and reconsider your position.