Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Technical Analysis - Beginners -- Ignore unavailable to you. Want to Upgrade?

To: Trader X who wrote (11394)	2/6/2001 4:42:13 PM
From: Michael Watkins	Read Replies (1) \| Respond to of 12039

TraderX Respectfully, I disagree. A hammer is simply the candle pattern described, and it must found during a decline in order to be a hammer. What happens tomorrow may invalidate the hammer, sure. If that's what you mean by confirmation, then we agree. However if one looks at a 'hammer-like' candle, its simpler to avoid the apostophe and -like and call it a hammer. What happens the next day will determine if one makes money from it or not. Either way - confirmation or failure, a trader can exploit the 'hammer-like' candle. We can agree to disagree or if you have some links to the definitive guide on hammer candles, I'm all eyes.

To: Trader X who wrote (11394)	2/6/2001 4:58:13 PM
From: MechanicalMethod	Read Replies (1) \| Respond to of 12039

I make my own rules. When I bend them it's a revision. When a revision fails I've learned something. My next version always comes from some creative rule bending. Mechanical Method

To: Trader X who wrote (11394)	2/6/2001 6:26:58 PM
From: TechTrader42	Read Replies (4) \| Respond to of 12039

"If something you consider to be a hammer does not wash out that way the next day, then your assumption is incorrect." A hammer is a bar with a small body at the top of the day's range and a long lower shadow, with little or no upper shadow. Hammers can indicate reversals in the downtrend; then again, they may not. Sometimes hammers signal the end of a decline. Sometimes they don't. Nison gives examples of hammers that aren't successful in signaling changes in trend. For example, look at Hammer 4 on Page 32 in "Japanese Candlestick Charting Techniques." And on another note, maybe CSCO will help nudge QQQ into the abyss tomorrow. Then again......

To: Trader X who wrote (11394)	2/6/2001 7:03:35 PM
From: parker_meridian	Read Replies (1) \| Respond to of 12039

The true test of a candlestick is in the confirmation. If something you consider to be a hammer does not wash out that way the next day, then your assumption is incorrect. A hammer by definition is a reversal candle. If the next day shows a continuation of the trend, then it was not a hammer. If there is no confirmation then the trade was invalidated, however, once a hammer always a hammer. The candle cannot be redrawn, it is what it is. Most individual candles of course mean nothing, it is there placement in the trend or in relation to each other that is of signifigance. I would also agree that in the "close enough" concept for candles that are not quite definition perfect but exhibit the concept very closely. Look at how Nison speaks of putting candles together to form a defining one. Unfortunately in the real world one can't keep going through charts to look for the absolutely perfect examples that end up in textbooks.