Trading Hammers (revisited)
- Thread starter NihabaAshi
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According to my posted checklist this seems to be a valid Hammer Pattern, not just a Line. Don't understand why you don't see it as such.
According to my posted checklist it seems to be a valid pattern.
Can you post a chart of what your talking about ???
I did not have a valid Bullish Hammer Pattern for ES, ER2, NQ and YM between 1015am - 1030am est via the sub-groups I'm discussing in this thread.
I only saw a bunch of Hammer Lines...not patterns.
Therefore, my next guess is that I have a strong feeling your not talking about the same thing as I did when I said the below...
After a second read of your post...I realize now you were not talking to me although you quoted my quote.
NihabaAshi
Hi simki,
Thanks for joining in on the discussion and with a chart example.
Is your chart a 3min chart of the Hang Seng U Futures ???
Yes...that's a valid Bullish White Hammer Pattern via the rules I've disclosed so far in this thread.
Also, I don't have access to any Hang Seng Futures charts.
With that said...if your trading the Hang Seng Futures...your continued participation via the Hang Seng will be appreciated by me.
Now for a more in-depth discussion about the price action in your chart.
Where would you have placed your initial stop/loss protection ???
Although I can't see what price the High was for your White Hammer Line...15177.00 ???
Based upon that High price and the info I can only see in your chart and upon the info of the White Hammer Line...
My initial stop loss protection would have been around 15142.00
Also, I don't have any live recording of your Hang Seng price action.
I can't tell from your chart if my trigger price would have been reached had I taken that trade.
If my trigger price had been reached...I would have moved that initial stop/loss protection from 15177 to a breakeven stop.
Thus, I would have been stopped out at breakeven in that 2nd candlestick line after the white hammer line.
There's something I don't like about your chart that involves the three consecutive dark candlestick lines that are the prior three intervals before the White Hammer Line.
I'll explain more about that later when I see another similar chart posted by anyone (including me) as yours with that same price action...
Will explain what the White Hammer Line needs to do in that particular type of price action.
Once again...I don't follow the Hang Seng Futures nor its live-recordings.
However, I would like to follow it from its Open to its Close but can't due to my time zone and spouse would say its too much.
Thus, would greatly appreciate your Hammer analysis and its application for trading the Hang Seng.
NihabaAshi
Quote from NihabaAshi:
Another reason is that if you change the chart interval of a long legged doji...
Most likely your going to see either a Hammer Line or valid Hammer Pattern due to the fact that Dojis and Hammers are part of the Long Shadow Family.
I discussed early about a topic called Candlestick Blending or De-Blending to allow seeing more of the playing field while only concentrating on 1-2 chart intervals for those traders not using multiple monitor workstations.
For example via the 5min chart interval...you visually merge two intervals to produce and image of the 10min chart interval or merge three intervals to produce an image of the 15min chart interval based upon the Open of the first interval in the merge and the Close of the last interval in the merge.
Thus, if you can talk about Dojis in this thread but preferrably as part of the blending or de-blending of intervals that produces a Hammer Line or Hammer Patterns.
However, I myself will not participate in discussions of Dojis all by itself in this thread unless it involves the blending or de-blending of Hammers.
Therefore...to only discuss dojis all by itself will open the door for discussions of all those other candlestick patterns and their respected sub-groups of the Long Shadow Family.
Besides...most traders will just show up and make a comment (not useful comment) about dojis...not post charts or not share any rules nor give any peek inside their trading plan for trading such...
The above has been the norm here at ET and I don't expect it to change.
There's a learning process to trading and too many traders want it all presented in front of them all at once.
Diluting this Hammer discussions with other candlestick pattern discussions will encourage that mentality of trying to find a short cut or trying to absorb too much info at once.
Another option is to start either a different thread on Dojis or a different thread on Long Shadows.
Yet, if you do the latter above (Long Shadow thread)...please include a link in your opening post to this Trading Hammer (revisited) thread.
I will participate in that thread but I will not carry its discussion because I'm not the thread starter.
Long Shadow Family:
* White Hammers
* Dark Hammers
* Long Legged Dojis
* White Shooting Stars
* Dark Shooting Stars
* Dark Inverted Hammers
* White Inverted Hammers
* Small Real Bodies (dark or white) with Long Shadows
* White Hanging Man
* Dark Hanging Man
There's one more in the above but at the moment I just can't remember it.
NihabaAshi
Looking at yesterday's action in the ES, at 11.05EST there was a long legged doiji at a temporary top that also appeared as a dark inverted hammer in other chart timeframes. Apologies for not posting a chart, but I use Market Aspects which doesn't allow me to post a chart.
I haven't researched or traded this idea, but it seems to me quite often we see long legged doijis at market tops/bottoms. I wonder if anyone trades them or is willing to share what they consider important criteria for the prior/post candles after and before the long legged doiji. Is it the same criteria as a dark inverted hammer?
In using candlestick signals as part of my trading I have personally found the best signals are the ones that confirm in more than one timeframe.
I also wonder if traders that only trade hammer signals must trade more than 1 market because if you are trading ES, for example, there wouldn't be enough signals.
Long Legged Dojis can be traded the same way as any other candlestick pattern that's a member of the Long Shadow Family.
However, I don't recommend such because each has a different price action that traverses into their respected Long Shadow Lines.
Therefore, for me...Dark Inverted Hammers and Long Legged Dojis are not traded (same rules) the same way.
As for ES...
Regardless if its the only trading instrument someone trades...
They still should be monitoring closely the price action of its sister trading instruments (ER2, NQ and YM) and via a different chart interval to have more vision of the playing field...
If they are unsatisfied with the a few trade signals per week via trading only one trading instrument...especially one like ES.
What I'm saying is that there's an advance level of trading for those that understand the price action and its big picture for the day.
If your at that level of trading...you can do a sister trade in ES simply via valid Hammer Patterns in its sister trading instruments (preferrably via YM or NQ...not ER2).
A higher level of trading is doing sister trades via the relationship of the U.S. Eminis and Eurex Index Derviatives...
As I hinted in my prior post about the valid Bullish White Hammer Pattern in the DAX while ES, YM, NQ and ER2 only had Hammer Lines (no valid Hammer Patterns via this thread discussion).
Thus, all the traders I know that only trade Hammer Patterns aren't beginners...
They are veteran traders with a strong understanding of the big picture for most trading days that allows them to trade different trading instruments because those trading instruments have similar like price action (sister markets).
In fact, I know one guy that trades ES exclusively and successfully for many years.
His Hammer Pattern trades in ES are via Hammer Patterns in the following sources although he doesn't open a position in these sources:
* DAX
* DJ EuroStoxx50
* CAC40
* YM
* NQ
* S&P Cash Index
Also, he doesn't ignore any Hammer Patterns in ES itself.
More importantly, I wouldn't recommend such (sister trades) unless you have a good understanding on what moves these markets and have a good feel for the price action long before any appearence of a Hammer Pattern...
The big picture.
Yet, if you are comfortable with 1-3 trade signals per week via trading one trading instrument and not following anything else...
Nothing wrong with that.
NihabaAshi
NA, according to my posted checklist, this Hammer Line is a Valid Hammer Pattern:
http://www.elitetrader.com/vb/attachment.php?s=&postid=835979
http://www.elitetrader.com/vb/attachment.php?s=&postid=835979
Yes...its a valid Bullish White Hammer Pattern...reason why I posted the chart and annotated it as a Bullish Price Pattern along with stating such in my opening message...
However, your quote below that followed seems to be talking about something else or that you thought I said it was not a valid Bullish White Hammer Pattern...
Regardless to the confusing statement...
We both know its a valid pattern.
NihabaAshi
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