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This thread is primarily for those (myself included) wanting to learn from the more veteran candle stick charters here. I'm in the process of reading Japanese Candle Stick Charting Techniques by Steve Nilson, and am finding that I have a lot of questions with some of the content. So, in an effort to help anyone that is interested, I'll ask all my questions in this thread.
Chart Pattern: "The Hanging Man" which consists of a small read body, with a long tail, typically twice the length of the real body, is a bearish reversal signal that may signal a top. Nilson explains that, you wait for confirmation (a gapping down day) after The Hanging Man, and this is because, everyone that went long on the open or close of the previous Hanging Man day is essentially left "hanging" with a losing position after the following gap down.
My question:
Isn't this true of -all- days regardless of whether its a hanging man? If tomorrow gaps down from today, clearly everyone that went long today would be in a losing position. This doesn't seem like a reasonable explanation of the Hanging Man's bearish nature.
Chart Pattern: "The Hanging Man" which consists of a small read body, with a long tail, typically twice the length of the real body, is a bearish reversal signal that may signal a top. Nilson explains that, you wait for confirmation (a gapping down day) after The Hanging Man, and this is because, everyone that went long on the open or close of the previous Hanging Man day is essentially left "hanging" with a losing position after the following gap down.
My question:
Isn't this true of -all- days regardless of whether its a hanging man? If tomorrow gaps down from today, clearly everyone that went long today would be in a losing position. This doesn't seem like a reasonable explanation of the Hanging Man's bearish nature.
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