Golden Hammer

DEFINITION of 'Golden Hammer'

An excessive dependence upon a specific tool to perform all sorts of functions. The golden hammer principle states that given a specific tool to use, all of the world looks like an appropriate place to use that tool. For example, a small child that is given a hammer may regard everything around him or her as a nail.

BREAKING DOWN 'Golden Hammer'

The golden hammer is also known as Maslow's Hammer or the Law of the Instrument. It was first voiced by Abraham Kaplan in 1964 and then widely disseminated in Abraham Maslow's book "The Psychology of Science" in 1966. The idea has also been attributed to Mark Twain, despite the lack of evidence to that effect. In business, it refers to an overdependence on a tried and true strategy or instrument, when another approach may be more suitable.

RELATED TERMS
  1. Hammer

    A price pattern in candlestick charting that occurs when a security ...
  2. Golden Rule

    The Golden Rule, as it pertains to government spending, stipulates ...
  3. Golden Bungee

    A benefit conferred to select top executives that is a combination ...
  4. Golden Cross

    A crossover involving a security's short-term moving average ...
  5. Hammering

    The rapid and concentrated sale of a stock thought to be overvalued ...
  6. Golden Boot

    An inducement or incentive for an older worker to "voluntarily" ...
Related Articles
  1. Trading

    What a Golden Cross Might Mean

    Many technicians see a golden cross as a sign that a stock’s value is headed higher. If a stock’s performance continues to lag, and no golden cross appears, its moving averages will remain roughly ...
  2. Financial Advisor

    Investing After the Golden Age

    How can advisors manage client expectations now that the "Golden Age" of investing is over?
  3. Trading

    Forex Investing: How To Use The Golden Cross

    Many currency traders know about the golden cross, but most don't utilize it. Learn how you can profit from this FX trend indicator.
  4. Trading

    Pivot Points

    Learn more about this technical indicator and how you can use it as a predictive tool.
  5. Financial Advisor

    Online Tools to Help Make Retirement Savings Last

    These online tools can help stretch retirement dollars as far as possible.
  6. Retirement

    Why Online Retirement Planning Tools Could Betray You

    Retirement calculators on the web may paint a dangerously rosy picture of your future, according to new research from Texas Tech University.
  7. Personal Finance

    Teaching Your Child To Be Financially Savvy

    If you start today, you can set your kids up for a lifetime of smart money management.
  8. Trading

    Taking The Magic Out Of Fibonacci Numbers

    Uncover the history and logic behind this popular trading tool.
  9. Markets

    What Is Equilibrium?

    Equilibrium is a state of balanced supply and demand.
  10. Trading

    4 Types of Indicators FX Traders Must Know

    Successful forex traders know how to use market indicators that reveal the best time to buy or sell a forex cross rate. Here are four of the most popular.
RELATED FAQS
  1. How do I build a profitable strategy when spotting a Hammer pattern?

    Understand how analysts use the hammer candlestick pattern to establish trading strategy to enter and exit the trade and ... Read Answer >>
  2. How effective is creating trade entries after spotting a Hammer pattern?

    Learn the elements of creating an effective trading strategy based on the hammer candlestick pattern for circumstances that ... Read Answer >>
  3. How are Hammer patterns interpreted by analysts and traders?

    Understand the components of the hammer candlestick pattern, and learn how traders and analysts interpret this pattern when ... Read Answer >>
  4. What are the main differences between a Doji and a hammer pattern?

    Identify the differences between doji candles and hammers on a candlestick chart, and learn how traders look at each for ... Read Answer >>
  5. What is "hammering"?

    "Hammering" is a situation where large sale orders are placed against a particular stock because investors believe that the ... Read Answer >>
  6. How do I build a profitable strategy when spotting a Golden Cross pattern?

    Learn the primary trading strategies that traders and market analysts employ when they have identified the occurrence of ... Read Answer >>
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center