What Is a Golden Hammer?
A golden hammer is excessive dependence on a specific software to perform many quite a lot of functions. In investing it is when a broker is predicated on one specific analysis software or standpoint to make all alternatives.
Key Takeaways
- A golden hammer refers to the over-reliance on one skill.
- This kind of narrow skillset is fraught with issues because of there is a bias to the familiar.
Golden hammers moreover happen inside the industry world when a company uses a single demographic or analytic to make strategic alternatives. As they’re pronouncing, while you give a company’s keep watch over team of workers a hammer, then the entire thing spherical them appears to be a nail.
The golden hammer thought is often referred to as the law of the device or Maslow’s hammer.
Understanding a Golden Hammer
While the golden hammer period of time basically applies to training, research, and scientific fields, it may be able to moreover relate to an overdependence on a tried-and-true industry methodology or investment manner. Using a golden hammer would in all probability mirror a bias against the familiar. It moreover may be spotted as a solution without refinement. The golden hammer would in all probability art work, even supposing a miles much less drastic manner may be further appropriate.
Technical Analysis and Golden Hammers
The golden hammer will have to not be confused with a hammer inside the field of technical analysis, a willpower that involves the learn about of earlier worth charts to be expecting long term prices. In this instance, a hammer is a single candlestick pattern with a longer lower wick, a short lived body on the most productive, and with a little of upper wick. Extra continuously than now not of thumb, the lower wick will have to be no less than two instances as long as the upper wick to be a hammer.
A hammer pattern can also coincide with so-called golden ratios, often referred to as the Fibonacci retracement levels of roughly 161.8%, or further ceaselessly, its inverse, 61.8%. When this happens, technical patrons tend to view the hammer as a particularly strong signal {{that a}} stock worth would in all probability reverse its prevailing development.
On the other hand, this mixed signal is not necessarily known as a golden hammer. Fairly, it is simply a hammer pattern that takes place at a 61.8% golden retracement.
Golden Hammers in Gaming
Of bear in mind, the golden hammer has made its means into plenty of a good fortune video video video games, all through which it is a go-to weapon. For instance, a golden hammer turns out in a large number of titles inside the Super Mario game family. While it in reality works like an ordinary hammer to damage obstacles that might in all probability kill the player’s on-screen character, the golden hammer is further tough and can allow the character to go with the flow in midair. Thus, proper to the definition, it is a weapon for the majority uses.
