This post was originally posted here. The writer, Rayner Teo is a veteran community member and blogger on InvestingNote, with username known as Rayner and has 310 followers.
According to most textbooks:Whenever you spot a Hammer candlestick pattern, you should go long because the market is about to reverse higher.
And that’s what you do.
But the next thing you know…
The price immediately reverses and you get stopped out for a loss.
And you wonder to yourself:
“Wait a minute, isn’t a Hammer candlestick a bullish signal?
“Why did the market reverse against me?”
“What’s going on?”
Well, let me tell you a secret…
A Hammer
...