Hammer Down Forex Profits By www.ForexConspiracyReport .com
Oct 19, 2014
Hammer down Forex profits with the Japanese candlestick hammer signal. Forex traders can use the Hammer Signal to
profitably anticipate the conversion of a bear trend into
a bull trend.
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The signal is a single candlestick shaped like a
hammer with little or no upper shadow, a small body, and a
long lower shadow. To successfully hammer down Forex profits with this signal
context is important. www.ForexConspiracyReport.com
When this candlestick occurs in an established downward
market and then the following day trades upwards it can be a strong signal of the conversion to a bear to bull market and a good way to anticipate change
in Forex currency rates.
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Japanese candlesticks are an easy to read and understand set
of visual signals for trading equities. Although they were
developed for commodity trading (rice) in ancient Japan they are used successfully today to trade
stocks and Forex as well.
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When we say that you can hammer down Forex profits with the hammer signal we mean that you can use the signal in technical Forex
trading to predict future price movement of a Forex trading
pair. www.ForexConspiracyReport.com
Traders will often look for volatility in their search for the most profitable currency pair.
They will then use candlesticks to read the
market.
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The hammer signal is a single candlestick. It looks like a
hammer with little or no upper shadow and a long lower
shadow. It has a fairly squat body which looks like the
head of a hammer.
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This candle needs to be seen in a well established downward
trading trend in order for it to be read as a signal for a
market reversal. In addition the next day needs to trade up in order to confirm the signal.
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The signal, therefore, includes the previous trend, the candlestick, and one
subsequent upward trading day.
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One can also forecast bullish trends with the bullish engulfing signal but that is a two candlestick signal and although it also forecasts an uptrend it is
distinctly different in appearance.
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In this case the traded Forex currency is falling in value in relation to the base currency. It has been doing so for some
time in a well established trend.
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As with all Forex trends there often comes a time when
market sentiment overshoots what fundamentals will
support. Or, the fundamentals may change.
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In either case there comes a day in which the traded
currency opens in line with established trend and then trades substantially lower
throughout the day.
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However, traders are having second thoughts and start to
buy the traded currency after it hits the low for the day.
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The buying picks up steam and drives the price of the currency back up to where it is close to where it started the day. This
recovery from a day of very low trading is significant and indicative of a change in
market sentiment. www.ForexConspiracyReport.com
When the next day trades upwards the combination of a
bear trend, hammer candlestick, and up day are
strongly predictive of the emergence of a new bullish
trend for the currency.
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To the extent that the hammer signal has a very long low shadow it is more strongly
predictive of a change to a bull trend. A white candle is also slightly more indicative of the
conversion to bull trend.
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Not to be frivolous but, who cares?
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The point of technical trading in order to hammer down profits with the hammer signal is that
the signal indicates a change in market direction regardless of what fundamentals or market psychology have changed the
direction of trading.
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Hammer down profits with the hammer signal or other easy
to read signals when trading Forex with candlesticks
.
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For more insights and useful information about trading foreign
currencies please visit www.ForexConspiracyReport.com