The Hanging Man is a single day pattern.
It has a none or very little upper shadow and the real body is towards the top of the candlestick. Real body itself can be bullish or bearish. For real impact, the lower shadow of the hanging man should be at least two times the height of the real body.
Hanging man occurs during an uptrend and can signal the top of that uptrend. Trader has to wait for confirmation of the hanging man’s impact with the next trading day session close and make sure it is below the hanging man’s real body.
Hanging man is a bearish trend reversal pattern and occurs during an uptrend and could indicate that the price of the asset might start going down.
Psychology of Hanging man pattern is that market is in a uptrend and
On the market day of hanging man open bears start selling resulting in price decline.During the day, bulls take over control and push prices back towards the start of the day price. The closing price can be above or below the open, although the close should be near the open in order for the real body to remain small.
Next trading day after the hanging man appears ,if the price opens lower on the price chart then traders who bought at the opening or closing of the day might give up and sell resulting in lowering of the asset price. This confirms bears are in control.
Whereas Hammer indicates potential price reversal to uptrend, Hanging man signals a potential price reversal to downtrend.