Why were neither of these red hammers reversals? (pic)

Discussion in 'Technical Analysis' started by IronFist, Jul 17, 2007.

  1. Hammer formation after a significant downtrend, yet neither of them were followed by a reversal.

    (7/17/07 RMBS 1 min chart)

    [​IMG]
     
  2. The "close" of any intraday period is much more likely to be noise than the close of the day. Therefore, suggest you not use candles of shorter duration than "daily".
     
  3. Candles work fine intraday if proper parameters are set.
     
  4. [​IMG]


    the first hammer gapped down so the gap became first resistance

    then they tried to rally the second hammer but it only rallied into old support that became new resisitance once it was broken

    17.94 was support for 5 times at 10:30 the risk reward was bad 17.90 to 17.94
     
  5. That was a helpful reply. Thanks.
     
  6. jtnet

    jtnet

    because its a 1min chart which is bs
     
  7. About candles in general...

    Considering daily ones....

    The Open reflects pent-up psycho, momentum, overnight news, etc.

    The Close reflects the reaction to the day plus the "comfortable" price going into the overnight.

    When you think of intraday candles in this light, their consideration is hardly credible.
     
  8. [​IMG]

    same thing just happened in the minis, it broke support, made a doji and they ran it up but it failed at the broken support
     
    #10     Jul 17, 2007