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...An example, of which is pondering me would be, if a bullish hammer appears at a strong resistance level, would that be taken as a long signal or would you just stand aside?
Blu-Ray |
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Hi Blu-Ray,
It's extremely important for you that when asking questions about a particular price action situation to post a chart example that correlates with the question to prevent any misunderstandings.
I myself tend to not respond nor participate in discussions when charts aren't posted to support questions about specific price action associated with Japanese Candlestick Analysis because it too often leads to misunderstandings.
For example, this is how I interpreted your question.
Your talking about price rising up and above a existing resistance level to only drop back down to that resistance level that
may be now acting like a support level along with the appearance of a Bullish Hammer pattern...
Correct???
Also, your use of the term
strong resistance implies that the price action had tested that level on prior occasions and then retraced.
Thus, the retracement gave merit that it was a resistance level that got confirmed.
I myself can't answer that question unless I closely examine the price action that had risen and then drop to the resistance (support) level when the Bullish Hammer pattern appeared.
I can't imagine stepping aside unless you have some facts (stats) to support that's a time to ignore this bullish pattern.