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

I

IronFist

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

(7/17/07 RMBS 1 min chart)

nothammers.jpg
 
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".
 
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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
 
Quote from joepepper2001:

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
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That was a helpful reply. Thanks.
 
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.
 
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