The Hammer is comprised of one candle. It is easily identified by the presence of a small body with a shadow at least two times greater than the body. Found at the bottom of a downtrend, this shows evidence that the bulls started to step in. The color of the small body is not important but a white candle has slightly more bullish implications than the black body. Criteria The lower shadow should be at least two times the length of the body. The real body is at the upper end of the trading range. The color of the body is not important although a white body should have slightly more bullish implications. There should be no upper shadow or a very small upper shadow.
not really a classic hammer as it turns out.. the body is the wrong color and the head is not high enough. But I still think it probably signals the low for the day..
any good candlestick education websites?I never got candles but lots o people swear by em...what about pt and figure?
It's replies like the ones in this thread that make ET such a great place to come. I have a pdf book that explains candlesticks if anyone is interested. It is mainly based on Forex but price action is price action.
reno - if you use candlesticks in your daytrading, I suggest you study them more as you'll find out that sometimes the market is not 'textbook'. If you are waiting for the picture perfect hammer, you'll wait for awhile and that one will probably fail. STOP HAMMER HUNTING. Either LEARN what these candlesticks are saying or find some other method for trading. It's obvious from your replies here that you are either new to trading or new to candlesticks and there's so much more going on here than playing 'find the shape'.... This is why threads later come up of 'Hammers don't work!'
good call. trading.:eek: lol...IWM is now in the crapper, challenging the lows of the day. Nothing in TA works every time, but over the course of many years I've found this particular pattern to be worthy.