What physical structural characteristics define a 'Hanging Man' candlestick pattern, and what market signal does it provide?

[ A ]Occurs after an established uptrend; has a small real body near the top of the price range, little or no upper shadow, and a long lower shadow at least twice the length of the real body; signals a potential bearish reversal requiring downward confirmation on the subsequent candle.[ CORRECT ]

[ B ]Occurs at the bottom of a downtrend; has a huge green body with no lower shadow; signals a guaranteed 100% price surge.

[ C ]Occurs in flat sideways markets; has a large square body with equal upper and lower shadows.

[ D ]Represents an error in stock exchange data transmission with zero analytical significance.

Takeaway

Option A is correct: Occurs after an established uptrend; has a small real body near the top of the price range, little or no upper shadow, and a long lower shadow at least twice the length of the real body; signals a potential bearish reversal requiring downward confirmation on the subsequent candle.

Derivation

A Hanging Man is a single-candlestick bearish reversal formation: (1) Preceding Trend: It forms after a sustained price advance or uptrend. (2) Geometry: It has a small real body (open and close are close together) at the upper end of the trading range, little or no upper shadow, and a long lower shadow/tail that is at least twice the height of the real body. (3) Psychology: The long lower shadow shows that aggressive intraday selling occurred, signaling emerging weakness among buyers. (4) Confirmation: It serves as an early warning; traders require a confirmation candle closing lower on the following day before executing short trades. This tests candlestick pattern recognition. The common trap is confusing Hanging Man (at market tops) with Hammer (at market bottoms).

Why the others fail

B — Occurs at the bottom of a downtrend; has a huge green body with no lower shadow; signals a guaranteed 100% price surge.

A formation with a long lower shadow appearing at the bottom of a downtrend is a bullish 'Hammer', not a Hanging Man.

C — Occurs in flat sideways markets; has a large square body with equal upper and lower shadows.

Equal large shadows and a square body describe a High Wave or Spinning Top candle in consolidation, not a Hanging Man.

D — Represents an error in stock exchange data transmission with zero analytical significance.

Hanging Man is a classic, widely recognized technical candlestick formation reflecting intraday seller penetration.