Same can probably be said of anything though. 2 people can study the fundamentals of a company and come up with completely different opinions/interpretations. It's just a big game of uncertainty.
Indeed! Skill has nothing whatsoever to do with it. When it comes to TA, it's a perfectly level playing field and anyone with a Wizards book is a wizard.
Confirmed 1057..... When? Probably 3 months or so when that level gets tagged go all in long with leverage.
It wasn't just a single hammer. It was also a triple bottom of sorts, near a previous resistance area (April 2010) and near a long-term Fib level (38.2% from summer 2010 low to April 2011 high). There were quite a few reasons to think yesterday was at least an intermediate-term bottom. TA works sometimes, maybe enough to be profitable (depending on your skills), but it's not foolproof. If you always look for a reason why something "wasn't really a buy/sell signal" in hindsight, you're just curve-fitting.
First, 1a2b3cppp never said what you just said. In fact, he only discussed a single hammer (yesterday) and then later discussed today a possible double hammer setup. Japanese Candlestick analysis wasn't designed as such and it allows the bashers (e.g. Clubber Lang) to show up to say it candlestick analysis doesn't work or TA doesn't work when in reality it's being used incorrectly. As I stated before, this is not a bullish pattern via what he stated...he needs confirmation. As for Fib stuff...I'm not a Fib guy and I don't see any intermediate-term bottoms, double bottom nor triple bottom. With that said, that link I posted earlier discusses a few myths about Japanese Candlestick analysis or TA in general. 1. Don't use single candlestick analysis. It's a myth that it's a reliable trade method. 2. Don't use Japanese Candlestick analysis by itself. It's a myth that it's reliable by itself. It should only be used as a confirmation tool into an obvious price direction. Hello...the market has not been going up. 3. Don't ignore the overall market context when using TA. Debt ceiling crisis the prior few weeks along with today's ECB conference is the market context. That's only a few things in the recent market context acting like a black cloud over the markets that I have time to mention. Yeah, you can do some Long positions...keep it tight on the stops and lower the position size because it's high risk trading until we get confirmation via market context and TA in combo. P.S. I'm a TA user but I don't use it alone. Mark
Well mktrader mentioned that many saw the hammer (one with a long tail!) as a buy signal because it occurred near previous points where the market had successfully turned around. Its obvious that nobody was going to trade this hammer if there weren't other supporting signs. The hammer is a reversal candlestick, the market doesn't need to be going up for it to be a valid buy signal. Besides, the market hasn't been trending since Feb, it has been moving sideways. There is no reason to consider other factors if a trader is trading solely based on TA, the market can rally on good news or bad news, context doesn't mean a thing when it comes to trading.