Charting and Studies User Guide - CQG.com

Page 230
Inverted Hammer
The Inverted Hammer formation is a bullish formation and therefore its symbol (IH) will always
appear at the bottom of the formation. It represents the opposite of the Shooting Star
formation. Four criteria establish an Inverted Hammer formation:
• The market has to be in a clearly definable down-trend, even if the trend is short term.
• A real body that is at the lower end of the trading range (body color is not important).
• A long upper shadow, which should be twice the height of the height of the real body.
• A short, if any, lower shadow, which should be at least twice as short as the real body.
An ideal Inverted Hammer formation is one that occurs after a downtrend or at the bottom of a
congestion zone. Also, the larger the gap between the real body of the formation and the real
body of the preceding bar, the stronger the confirmation. This, however, does not affect the
highlighting of the formation in any way.
This formation requires a value for the Trend parameter.
Shooting Star
The Shooting Star formation is a bearish formation and therefore its symbol (SS) will always
appear at the top of the formation. It represents the opposite of the Inverted Hammer
formation. Four criteria establish a Shooting Star formation:
• The market has to be in a clearly definable up-trend, even if the trend is short term.
• A real body that is at the lower end of the trading range (body color is not important).
• A long upper shadow should be twice the height of the height of the real body.
• A very short, if any, lower shadow, which should be at least twice as short as the real
body.
An ideal Shooting Star formation is one that occurs after an up-trend or at the top of a
congestion zone. Also, the larger the gap between the real body of the formation and the real
body of the preceding bar, the stronger the confirmation. This, however, does not affect the
highlighting of the formation in any way.
This formation requires a value for the Trend parameter.
Engulfing Bearish
The Engulfing Bearish formation is, of course, a bearish formation and therefore its symbol (EG)
will always appear at the top of the formation. It represents the opposite of the Engulfing
Bullish formation. Three criteria establish an Engulfing Bearish formation:
• The market has to be in a clearly definable up-trend, even if the trend is short term.
• Of the 2 candlesticks in the formation, the second candle's real body must engulf the
first candle's real body.
• The second real body of the formation should be "down" while the first real body should
be "up."
This formation requires a value for the Trend parameter.
Basic Studies