Candlesticks

This is a discussion on Candlesticks within the Technical Analysis forums, part of the Methods category; Hi, I was just wondering if somebody could explain to me what a "Hammer" pattern is in candlesticks and how ...

Reply
 
LinkBack Thread Tools Search this Thread
Old Oct 7, 2004, 6:14pm   #1
 
nefariousbaffler's Avatar
Joined Mar 2004
Candlesticks

Hi,
I was just wondering if somebody could explain to me what a "Hammer" pattern is in candlesticks and how to identify them. Thank you.
__________________
Know when to hold 'em, know when to fold 'em
nefariousbaffler is offline   Reply With Quote
Old Oct 7, 2004, 6:23pm   #2
 
trendie's Avatar
Joined Jan 2004
http://www.incrediblecharts.com/tech...ndlesticks.htm
trendie is offline   Reply With Quote
Old Oct 7, 2004, 9:02pm   #3
 
zambuck's Avatar
Joined Jan 2003
Hammer / Dragonfly Doji Bullish

Pattern: Reversal

Trend: Bullish
Reliability: Low/Moderate




How to Identify it

· Small real body at the upper end of the trading range

· Lower shadow at least twice as long as the real body

· No (or almost no) upper shadow

What it Means

There is a sharp sell off after the market opens during a downtrend. However, by the end of the trading day, the market closes at or near its high for the day. This signifies a weakening of the previous bearish sentiment, especially if the real body is white (the close is higher than the open price). Since the certainty for a Hammer indicator is low, the trend reversal can be confirmed by a higher open and an even higher close on the next trading day. If the open and the close are identical, the indicator is considered a Dragonfly Doji. The Dragonfly Doji has a higher reliability associated with it than a Hammer.






Inverted Hammer / Gravestone Doji Bullish

Pattern: Reversal

Trend: Bullish
Reliability: Low/Moderate



How to Identify it

· Small real body at the lower end of the trading range

· Upper shadow usually no more than twice as long as the real body

· No (or almost no) lower shadow

What it Means

As the market opens below the close of the previous day, the bulls rally briefly, but not enough to close above the previous day’s close. As this leaves shorts in a losing position, the Inverted Hammer presents the potential for an upcoming rally. Confirmation of the trend reversal would by an opening above the body of the Inverted Hammer on the next trading day. If the open and the close are identical, the indicator is considered a Gravestone Doji. The Gravestone Doji has a higher reliability associated with it than an Inverted Hammer.



Hammer / Dragonfly Doji Bullish

Pattern: Reversal

Trend: Bullish
Reliability: Low/Moderate



How to Identify it

· Small real body at the upper end of the trading range

· Lower shadow at least twice as long as the real body

· No (or almost no) upper shadow

What it Means

There is a sharp sell off after the market opens during a downtrend. However, by the end of the trading day, the market closes at or near its high for the day. This signifies a weakening of the previous bearish sentiment, especially if the real body is white (the close is higher than the open price). Since the certainty for a Hammer indicator is low, the trend reversal can be confirmed by a higher open and an even higher close on the next trading day. If the open and the close are identical, the indicator is considered a Dragonfly Doji. The Dragonfly Doji has a higher reliability associated with it than a Hammer.

All this is from a site called litwick....if you click any blue underlined then it will take you to that site....

I think it was Helenq who gave pointers for this site...I don't remember the source of this site..
__________________
zambuck

The most futile and disastrous day seems well spent when it is reviewed through the blue, fragrant smoke of a Havana Cigar.
Evelyn Waugh.

Last edited by zambuck; Oct 7, 2004 at 9:12pm.
zambuck is offline   Reply With Quote
Old Oct 8, 2004, 4:31pm   #4
 
Newtron Bomb's Avatar
Joined Apr 2001
The thing with patterns regardless of what they are called is where they form. Trading certain patterns can be profitable as long as you trade them in line with other tools in high probability trade set ups.

HTH

NB
__________________
Everything works some of the time
Nothing works all of the time

An Interview With Mr Phil Newton - Click here to read
Newtron Bomb is offline Coach/Trainer   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Similar Threads
Thread Thread Starter Forum Replies Last Post
Candlesticks Dave1971 Technical Analysis 7 Oct 21, 2004 11:06am
candlesticks Halfbutt First Steps 12 Oct 4, 2004 8:34am
japanese candlesticks wheezergeezer Educational Resources 2 Nov 11, 2003 1:03pm
Candlesticks dingers Educational Resources 2 Feb 9, 2003 7:07pm
Candlesticks strewthmate Technical Analysis 6 Jan 29, 2003 7:38pm

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)