medium · Volume Price Analysis validation
A trader identifies a 'Hanging Man' candle at the top of an uptrend.
How does its price action narrative differ from a Hammer?
- The Hanging Man has a long upper wick, while the Hammer has a long lower wick.
- The narrative is the same, but the location at a trend top turns the 'strength' into 'weakness.'
- The Hammer requires ultra-high volume to be valid, whereas the Hanging Man requires low volume.
- The Hanging Man represents a successful test of demand by insiders.
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