Hammer time.
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Thread: Hammer time.

  1. #1
    Hey everyone, I've been studying price action just like a madman lately but I jsut have a fast question. For a hammer or inverted hammer pub, why are these considered reversals? Don't they reveal domination by one or the other, the bulls or the bears? Or is it because after those bars, the consensus begins to fade off? Thanx for any help.

  2. #2
    Quote Originally Posted by ;
    Hey everybody, I've been analyzing price action like a madman lately but I jsut have a quick question. To get a hammer or inverted hammer pub, why are those believed reversals? Don't they show domination by one or the other, the bulls or the bears? Or is it because after those bars, the consensus starts to fade away? Thanx for any help on this.
    I only look at hammers which are in extreems. They appear to be one of the best ways in calling tops/bottoms. After a run up in price the bulls make an atempt for new highs but neglect which results in a near much lower than the achived high. Idealy the near will be bellow earlier candles close/open. The hammer reveals a few or All these folowing about the market:
    The market has reached a S/R;
    A number of those bulls(in an uptrend) are starting to take their profits;
    Price finds a lot of selling presure(uptrend) and fails to hold the new highs which subsequently migh provoke more profit taking;
    HTH

  3. #3

  4. #4
    Pesonally, I Believe true Hammers to be an Indiion of Overshooting the Intended Target. . . .Ooops, to far, escape.
    I also feel that Hammers are more prevelant lately since the inception of E-RookieTrader not understanding where the Intended Target actually was loed. Noise
    Traders from the'Know' pushing the price to'x' and Taggers pushing it to'x /y'
    Therefore, I wait to get a confirming Candle.
    After All, what's 15 minutes or 4 hours of my life compared to riches?

  5. #5
    The'tail' on the hammer reflects both buyers or sellers coming in and turning the market decisively down or up. There's often follow-thru to get at least a few subsequent candles.

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