As of 11/20/2024
Indus: 43,408 +139.53 +0.3%
Trans: 17,002 -26.31 -0.2%
Utils: 1,055 +1.25 +0.1%
Nasdaq: 18,966 -21.33 -0.1%
S&P 500: 5,917 +0.13 +0.0%
|
YTD
+15.2%
+6.9%
+19.7%
+26.3%
+24.1%
|
 46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,075 or 1,000 by 12/01/202420,000 or 18,400 by 12/01/20246,100 or 5,800 by 12/01/2024 |
As of 11/20/2024
Indus: 43,408 +139.53 +0.3%
Trans: 17,002 -26.31 -0.2%
Utils: 1,055 +1.25 +0.1%
Nasdaq: 18,966 -21.33 -0.1%
S&P 500: 5,917 +0.13 +0.0%
|
YTD
+15.2%
+6.9%
+19.7%
+26.3%
+24.1%
| |
|
46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,075 or 1,000 by 12/01/202420,000 or 18,400 by 12/01/20246,100 or 5,800 by 12/01/2024 | ||
My book,
Encyclopedia of Candlestick Charts
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The hanging man is probably one of the better known candlestick patterns, but it does not work as many expect. Candle theory says it acts as a bearish reversal of the prevailing price trend, but my tests show that it is really a bullish continuation 59% of the time. Of course, that is what I call "near random." The hanging man appears frequently in a historical price series, but the trend after the breakout is dismal, ranking 87 out of 103 candle patterns where 1 is best.
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Theoretical performance: Bearish reversal
Tested performance: Bullish continuation 59% of the time
Frequency rank: 16
Overall performance rank: 87
Best percentage meeting price target: 86% (bear market, down breakout)
Best average move in 10 days: -3.60% (bear market, down breakout)
Best 10-day performance rank: 59 (bear market, down breakout)
All ranks are out of 103 candlestick patterns with the top performer ranking 1. "Best" means the highest rated of the four combinations of bull/bear market, up/down breakouts. The above numbers are based on hundreds of perfect trades. See the glossary for definitions. |
 Hanging Man
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The hanging man candlestick is a popular one, but one that shows lousy performance. In theory, it is supposed to be a bearish reversal but it actually is a bullish continuation pattern 59% of the time. The best performance that it can muster is after a downward breakout in a bear market. Price drops an average of 3.60% in 10 days, ranking it 59 for performance. That is just mid list. Outstanding performance would be a move of 6% or more.
| Characteristic | Discussion |
| Number of candle lines | One. |
| Price trend leading to the pattern | Upward |
| Configuration | Look for a small bodied candle atop a long lower shadow in an uptrend. |
If you want a few bones from my Encyclopedia of candlestick charts book, here are three to chew on. The pages refer to the book where the tips appear.
The candlestick at A is a hanging man. Price opens near the high, drops much lower, and then claws its way back toward the high. In this case, the hanging man is a white bodied candle, but candle color is unimportant. The hanging man appears in an upward price trend, as required, only price breaks out downward in this example. Price tumbles. This hanging man performs as a reversal of the existing uptrend.
A downward breakout is not unusual since an upward breakout only occurs 59% of the time. I consider that almost random. With price closing so near the top of the candle, an upward breakout (a close above the top of the candle) should be expected anyway.
-- Thomas Bulkowski
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