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Yes, the hanging man needs confirmation, the hammer and hanging man are reversal patterns, the wick of the hanging man indicates the loss of bullish momentum is waning , since in this pattern the the initial selling is overcome by the buyers (hence longer wick), the bulls are still in control, only close below the low will indicate reversal, which also needs to be confirmed by other tools.
Hi Srinivas, not just hanging man, but all candlestick patterns need confirmation before you decide to trade based on them.
Speaking of hanging man, once a hanging man is printed, you need to wait for price to break below the low of the hanging man line. Once this happens, you can initiate a short trade by placing a stop loss above the high of the hanging man line.
That said, don't trade just based on hanging man. Combine them with other tools and indicators, to strengthen the validity of the signal.
