Ever stared at a chart and wondered if the candles are trying to tell you something about where price might go next? Maybe you’ve heard about some “mystical” patterns like the “Hanging Man” or the “Shooting Star” and thought, “What the heck — is that a signal or just a random shape?” If you trade (or plan to trade), you might want to get comfy, because I’m about to walk you — in a human, chat-over-coffee kind of way — through what these patterns really mean, how to spot them, and how you could (carefully) use them in your trading strategy.
This post is meant to give you a deep, full look — with details, tables, plain-English talk, and maybe even a few slip-ups like a real blogger — but lots of value if you want to understand reversal candlestick patterns under the hood.
What Are Japanese Candlesticks — and Why Should You Care
Before diving into “Hanging Man” or “Shooting Star,” let’s zoom out for a second. Candlesticks are a visual way to show price action over a given period (hour, day — you pick). Each candle shows the open, high, low, and close for that period. Traders love them because they visually reflect the tug-of-war between buyers (bulls) and sellers (bears).
Candlestick patterns (especially reversal ones) are popular because they attempt to catch moments when that tug-of-war changes direction. Instead of just hoping price keeps going up or down, reversing patterns give you a hint — a possible shift in momentum.
Two of the most common “single-candle” reversal patterns are the ones you asked about: Hanging Man and Shooting Star. They sound spooky — but once you know what you are looking at, they make sense.
The Players: Hanging Man vs. Shooting Star
Basic Definitions
| Pattern | When It Appears | Candle Shape / Structure | What It Signals (Potentially) |
|---|---|---|---|
| Hanging Man | After an uptrend (near a top) | Small real body near the top of candle; long lower shadow; little or no upper shadow ThinkMarkets+2Bigtrends+2 | Buyers losing strength, sellers gaining — bearish reversal feared Bigtrends+2LiteFinance+2 |
| Shooting Star | After an uptrend (peak) | Small real body near bottom of candle; long upper shadow; little or no lower shadow EBC Financial Group+2WisBees+2 | Bulls tried pushing up, failed — potential bearish reversal EBC Financial Group+2AdroFx | The Art of Trading+2 |
Important note — both are considered bearish reversal patterns (i.e. warning signals of possible upcoming downtrend). EBC Financial Group+2XS+2
But they differ in appearance and psychological story.
The Psychology Behind the Patterns
What Hanging Man Tells You
Imagine price has been climbing uphill for a while — bulls are confident. Then one day, you get a candle where price dips hard during the session (long shadow down), but by the close bulls manage to push it back near the open, so the candle body is small and close to the top.
That’s a Hanging Man. It suggests that sellers showed up strong at some point — shook the price down — but bulls rescued things before close. Yet that dip? It tells you the uptrend’s support might be weakening. Buyers may be tired or getting nervous. Sellers might be sneaking in. The uptrend could be ready to reverse. Bigtrends+2ThinkMarkets+2
But — and this is key — Hanging Man is a warning, not a command. You ideally want confirmation: a subsequent bearish candle that closes lower, or other signals (resistance level, volume, oscillator divergence) to confirm the shift. Bigtrends+2LiteFinance+2
What Shooting Star Says
Now picture an uptrend again. This time, price rockets up during the session (buyers pushing), reaching a high, but by the close sellers slam it back down so it closes near the bottom — small body, long upper wick. That’s a Shooting Star.
It basically says: “You tried — but you failed, bulls. Sellers pushed you down hard. Trend might be done.” It’s often considered a stronger immediate signal than Hanging Man, because the rejection of highs feels more forceful. XS+2EBC Financial Group+2
Still — context matters. Without confirmation, you could get whipsawed.
How to Spot Hanging Man & Shooting Star — Checklist
When you are watching charts and want to identify these patterns, here’s a practical checklist (for you) to follow:
Hanging Man Checklist
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Candle appears after a clear uptrend (price rising for some time) Bigtrends+1
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Small real body (color doesn’t matter much: green or red) near the top of the candle range Axi+1
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Long lower shadow — ideally at least twice the length of body ThinkMarkets+1
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Little or no upper shadow Axi+1
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Preferably near a resistance level or after a strong up move EBC Financial Group+1
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Wait for confirmation: next candle should ideally close lower / break the low of Hanging Man before acting ThinkMarkets+2LiteFinance+2
Shooting Star Checklist
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Also after an uptrend / near (or at) a possible peak or resistance area EBC Financial Group+2WisBees+2
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Candle has small real body near the bottom of the range EBC Financial Group+1
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Long upper shadow — ideally much longer than the body media.trinkerr.com+1
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Little or no lower shadow WisBees+1
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Indicates strong rejection of higher prices / bearish pressure — more “immediate” than Hanging Man XS+1
Why Context Matters — Don’t Treat Patterns as Magic
Here’s the thing — these patterns aren’t magic spells that guarantee price reversal. They’re more like behavior hints. They increase the probability of a reversal, but they don’t promise it.
Some caveats / things to watch out for:
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If the uptrend was weak or choppy (not a clear run up), a Hanging Man or Shooting Star might just be noise.
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Without confirmation (volume, follow-up bearish candle, resistance area, divergence), you might get false signals.
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They depend heavily on context: trend strength, support/resistance zones, market environment.
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Over-relying on single candles without broader analysis (trendlines, fundamentals, other indicators) is risky.
In other words — treat these patterns as clues. Combine with other analysis to build conviction.
How You Could Use These Patterns in Your Trading (If You’re Careful)
If you trade using technical analysis, you can build a simple strategy around these patterns — but with caution. Here’s a loose template (not financial advice — treat as educational):
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Use daily charts (or higher) to reduce noise. Candles on lower timeframes can be too volatile.
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Identify when price has gone up for a decent stretch (uptrend).
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Look for Hanging Man or Shooting Star near previous resistance zones or after strong rallies.
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When you see a valid pattern (using the checklist above), don’t jump in yet. Wait for confirmation: a bearish candle after, or a gap down, or supporting signals from volume/oscillator/support-resistance.
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If confirmed — consider closing long positions or opening short (if appropriate).
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Always manage risk: set a stop-loss (for example: above the high of the reversal candle), and a profit target (maybe next support, or use other tools like Fibonacci, support zones, etc.).
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Use with other tools: trendlines, support/resistance, oscillators (RSI, MFI), volume — candlesticks are part of the puzzle, not the whole picture.
Common Confusions & Misconceptions
It’s easy to misinterpret — and plenty of traders get fooled. Here are mistakes that happen a lot:
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Mixing up Hanging Man with Hammer — they look the same, but hammer appears after a downtrend (bullish), Hanging Man after an uptrend (bearish) ThinkMarkets+2LiteFinance+2
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Ignoring confirmation — trading the pattern immediately without waiting for next candle or volume confirmation. That’s risky.
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Overlooking the broader trend / context — if there’s strong bullish momentum (or fundamental news), a reversal candle might just get swallowed up.
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Relying only on candlesticks — ignoring support/resistance, volume, market sentiment, other indicators.
Quick Comparison: Hanging Man vs Shooting Star
Here’s a side-by-side look to help you remember the difference fast:
| Pattern | Wick Direction | Body Position | Typical Use Case | Strength / Weakness |
|---|---|---|---|---|
| Hanging Man | Long lower shadow | Body near top | Uptrend nearing exhaustion | Warning / early signal — needs confirmation |
| Shooting Star | Long upper shadow | Body near bottom | Uptrend nearing resistance / peak | Stronger rejection signal — often more immediately bearish |
FAQ — Frequently Asked Questions
“Can Hanging Man appear with either green or red body?”
Yes. The color doesn’t break the pattern. What matters more is shape (small body, long lower shadow, minimal upper shadow) and context (after uptrend). Axi+1
“Is Shooting Star always reliable?”
Nope. It’s a warning sign — a possible reversal. But like any signal, it can fail if trend is strong or there are bullish fundamentals. Use confirmation.
“Which is stronger — Hanging Man or Shooting Star?”
Many traders treat Shooting Star as stronger, because the rejection from highs tends to feel more decisive. But strength depends heavily on volume, context, and follow-up price action.
“Do I only trade based on these candles?”
It’s not recommended. Candlestick patterns are best used with other analysis — support/resistance, volume, indicators, market structure. Think of them as one piece of the puzzle.
“Can these patterns appear on small timeframes?”
Yes — but risk of false signals increases. Higher-timeframe charts (daily, 4h, weekly) tend to produce more reliable setups.
Why Understanding These Patterns Matters for Trading
If you’re serious about trading (stocks, forex, crypto — whatever), you quickly realize that price doesn’t go in straight lines. Reversals, pullbacks, traps — the market loves them. Patterns like Hanging Man and Shooting Star give you a heads-up that price might shift.
Using them doesn’t guarantee profits. But when combined with good risk management and broader analysis — they can increase your edge.
Think about it: rather than guessing or reacting impulsively, you look at price action, see a pattern, wait for confirmation — and then make a decision. That’s trading with awareness, not hope.
Conclusion
You came here wanting to understand reversal Japanese candlestick patterns. Now you (hopefully) see how the Hanging Man and Shooting Star work — not like magical predictors, but as psychological hints from the market.
You know how to spot them. You know what they suggest. You know how to build caution into using them. But — and this is important — you also know their limits.
If you incorporate these patterns into a broader, disciplined trading plan (with confirmation, risk management, context awareness), they can be a useful tool in your trading toolbox.
So next time you glance at a chart and see a funky candle with a long shadow — don’t panic or jump in. Just ask yourself: does this look like a Hanging Man or Shooting Star? Is the trend right? Is there confirmation?
You might just find yourself a bit better prepared — a bit more alert — and maybe, just maybe, a bit ahead of the crowd.
If you want more examples, live-chart screenshots, or a deeper guide (with volume + oscillator confirmation + support/resistance overlay) — I got you. Contact us via the web, and we’ll build it together.
Sources & Further Reading
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“10 Japanese Candlestick Patterns Every Trader Should Know” — EBC Financial Group EBC Financial Group
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“Hanging Man Candlestick Pattern — How to Use It” — Alchemy Markets Alchemy Markets
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“Understanding Japanese Candlestick Patterns” — BigTrends Bigtrends
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“Hanging Man Candlestick: What Is And How to Trade” — LivingFromTrading.com Living From Trading
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“Hanging Man Candlestick Pattern” — LiteFinance LiteFinance
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“An Ultimate Guide to Reversal Candlestick Patterns” — AdroFX blog AdroFx | The Art of Trading