Pattern Detail

Bearish Hanging Man

Single-candle bearish reversal after a rally: a small body up top with a long lower tail where buyers had to rescue a sharp dip.

A real Bearish Hanging Man on NQ daily bars, Oct 16, 2019. Price then followed through 0.5% over the next 5 bars. The bright candles are the pattern; the dimmed bars are surrounding context.
A real Bearish Hanging Man on NQ daily bars, Oct 16, 2019. Price then followed through 0.5% over the next 5 bars. The bright candles are the pattern; the dimmed bars are surrounding context.
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How to read this

Everything here is in R, the setup's own risk. 1R is the distance from the entry (the pattern's closing price) to where it would be proven wrong — its highest high over the 1 bar that form it. So "offered 2R" means price ran twice that distance in your favor at some point before the stop. It does not assume you took profit there: a target is a strategy choice.

Room offered (≥ 1R)

26.1%

Backwards

Offered at least 1× its risk before the stop, vs 37.1% for a random short entry (-11.0 pts).

Move size vs normal

0.81×

Realized range over the next 20 bars vs a random bar. Precedes a quieter stretch.

Typical room (20-bar)

0.73R

Average run in favor (capped at 3R), vs 0.97R for a random short entry.

Summary

Offered at least 1R of room only 26.1% of the time vs 37.1% for a random short entry — it offers LESS room than chance here. On this market and timeframe the structure works against you.

Room offered, this setup vs a random short entry

Outcome This setup Random entry Edge
Offered ≥ 1R 26.1% 37.1% -11.0
Offered ≥ 2R 24.2% 27.0% -2.8
Offered ≥ 3R 20.9% 20.5% +0.4
Stopped < 1R 73.9% 62.5% +11.4
Went sideways 0.0% 0.4% -0.4

2,932 occurrences · 1,108,593 random-entry controls · 20-bar horizon

A hanging man is a single candle that can cap a rally. It has a small body near the top of its range and a long lower tail, with little or no upper wick. The long tail shows that sellers dragged price well below the open during the bar before buyers hauled it back. The same shape after a fall is a hammer, a bullish sign. Up here, after a run, that dip is a warning that selling is creeping in.

Steve Nison treats the hanging man as one of the major reversal patterns in Japanese Candlestick Charting Techniques (1991): the same hammer shape, but a warning when it prints after a rally.

How to spot it

  • The market is rising into the bar.
  • The body is small and sits in the upper part of the candle’s range.
  • The lower tail is long, at least twice the height of the body.
  • There is little or no upper wick.
  • The body can be red or green. The shape matters more than the color.

The dashed box on the chart above marks the 1 candle on a real occurrence, with the advance before and the move after.

The psychology

The market is rising into the bar, so buyers feel in command. Then, inside the candle, sellers drag price well below the open and carve out that long lower tail. Buyers do rescue it, hauling price back near the top so the bar closes with a small body up high. On the surface the day looks fine.

The warning is buried in the tail. For the first time in this rally, sellers were able to push price sharply lower, and it took real buying just to get back to even. That selling did not exist a few bars ago. The same shape after a decline would be a hammer and read as strength, but up here, after a run, a deep dip that had to be bought back says the easy buying is thinning and supply is starting to appear. Control has not changed hands yet, but the grip is loosening.

A rescued dip at a high is an early crack, not a break. The figures below show how often that crack tends to widen.

Does it actually work?

A pattern is a setup, not a trade, so the honest question is not “did it win” but “how much room did it tend to offer before it was proven wrong.” The tabs below answer that across five futures markets (Nasdaq, S&P 500, gold, crude oil, natural gas) and seven timeframes from one minute to one day.

For each occurrence we measure the room the move offered in units of the pattern’s own risk, then set it against what a random entry on the same market would have done. When the pattern offers more room more often than chance, that shows up as a real edge. When it does not, the page says so plainly.

Read it with the sample size in view. On the faster timeframes a pattern can fire thousands of times, enough to trust. On the daily chart it is far rarer, so treat those numbers as a hint rather than a verdict. Thin samples are flagged for you on the page.

How we measured it

  • Entry is the close of the final candle of the pattern.
  • One unit of risk, 1R, is the distance from that close up to the pattern’s invalidation point: the highest high of the candle itself. If price trades through there, the setup is wrong.
  • We then follow the next 20 bars and record how far price ran in your favor, in multiples of that risk, before the stop was hit.
  • Every figure is set against a random entry on the same market and timeframe, so the market’s own drift is accounted for.
  • No profit target and no position sizing. Where you take profit is a strategy choice; this measures only the room the pattern tends to give.

What this page does not cover

  • Volume on the pattern’s candles.
  • Whether the pattern forms at a meaningful resistance level.
  • Pairing it with a trend filter or a confirming signal.
  • A profit target or position sizing. We use the pattern’s own invalidation point as the stop to define risk, but where you take profit, and how much you put on, are strategy decisions this page leaves to you.

Sample Bearish Hanging Man Firings (20)

Based on data through Apr 29, 2026

Time Risk (pts) Room offered Result
Apr 21, 2026, 10:51 AM CDT Open
Apr 20, 2026, 3:35 AM CDT Open
Apr 14, 2026, 3:55 AM CDT 1.25 0.00R Stopped
Apr 9, 2026, 7:45 PM CDT Open
Apr 8, 2026, 6:00 PM CDT 0.5 0.00R Stopped
Apr 6, 2026, 10:05 PM CDT 1 0.00R Stopped
Mar 31, 2026, 2:00 AM CDT Open
Mar 30, 2026, 3:00 AM CDT Open
Mar 22, 2026, 10:30 PM CDT Open
Mar 18, 2026, 6:05 PM CDT 2.5 0.00R Stopped
Mar 17, 2026, 11:05 PM CDT Open
Mar 16, 2026, 12:20 AM CDT 3 3.00R Ran ≥1R
Mar 13, 2026, 7:35 AM CDT 4.5 0.00R Stopped
Mar 13, 2026, 3:44 AM CDT Open
Mar 4, 2026, 3:25 AM CST 4.5 0.00R Stopped
Mar 2, 2026, 4:40 AM CST 0.75 0.00R Stopped
Feb 25, 2026, 2:55 PM CST 4 0.00R Stopped
Feb 25, 2026, 7:20 AM CST 0.5 0.00R Stopped
Feb 24, 2026, 12:35 AM CST Open
Feb 9, 2026, 10:25 PM CST Open

Sample backtest

Real backtested runs of this pattern, with commissions and slippage. Open one for the full equity curve and metrics, or backtest it yourself on your own contract and dates.

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