Are hammers really that important? Half work, half don't, does not that mean we are back at the coin toss?
Hammers are only effective with confirmations: 1. price moves above top of hammer 2. price closes above top of hammer (better than #1) without these two confirmations a hammer is not a bullish signal aggressive traders may enter early, but it is more risky exception: a hammer, esp. with white body, might be taken as a buy signal if it occurs with higher than average volume (volume spike)
Old Wall Street saying y'all might want to take note of: the bears have Thanksgiving, but the bulls have Christmas.
Are you saying that following a hammer, on a subsequent bar if price closes above the top of the hammer that price is more likely to keep going up than to go back down?
No single part of a trading plan such as Pattern signal is "that important" in the scheme of the whole plan It has to be combined with exit , mm , and about 20 other things part of a complete trading plan. I like to keep my eye on a few subsets of Hammers and thought I would point out the fact that some of those subsets occurred on the daily chart. They only occur 1-3 times a year. It would be like if I said, oh look , engulfing bar occurred today. Take it or leave it, just an observation and unless you know your own plan you wouldn't know the probabilities of X pattern signal working to your favor Y amount of time anyhow.