Trading Hammers (revisited)
- Thread starter NihabaAshi
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Personal observation
As I only trade ES, I will comment only on it. Before going into live trading I have followed ES real-time charts for a long time and am now used to identifying small, medium and large intraday swings during normal trading conditions.
From what I can see Bullish White Hammers seem to work best when ES drops say at least 6 points. Anything less I, personally, would consider not sufficient enough of a decline to enter into a trade. Though of course there are many other indicators one can watch out for.
Like in the chart above (YM) Dow dropped around 20 points, which is not much of a swing for it.
Anyway, this is simply my observation.
As I only trade ES, I will comment only on it. Before going into live trading I have followed ES real-time charts for a long time and am now used to identifying small, medium and large intraday swings during normal trading conditions.
From what I can see Bullish White Hammers seem to work best when ES drops say at least 6 points. Anything less I, personally, would consider not sufficient enough of a decline to enter into a trade. Though of course there are many other indicators one can watch out for.
Like in the chart above (YM) Dow dropped around 20 points, which is not much of a swing for it.
Anyway, this is simply my observation.
Here are 3 charts of ESM6 i am not sure how to upload them in 1 post, therefore in 3 posts, sorry.
I was monitoring 3,5 and 15 min charts. The signal was initiated @ 13.24 on 3 min, then confirmed @ 13.25 on 5min and then re-confirmed @ 13.30 on 15min chart.
I am still not sure which Hammer line that was
, but it worked out. I bought @ 1309.12 and sold 1/2 @ 1311.11 and the remainder @ 1313.
I was monitoring 3,5 and 15 min charts. The signal was initiated @ 13.24 on 3 min, then confirmed @ 13.25 on 5min and then re-confirmed @ 13.30 on 15min chart.
I am still not sure which Hammer line that was
, but it worked out. I bought @ 1309.12 and sold 1/2 @ 1311.11 and the remainder @ 1313.Hi romik,
What was your pattern signal if you don't mind sharing what you saw besides what you mentioned earlier about the 6 point drop requirement?
Looking at your charts...I don't see any Hammer patterns that would have caught my eye.
I see other stuff not related to Japanese Candlesticks and I was wondering if you had other confirmations besides those Hammer Lines.
Thanks for the charts.
Edited In: I see on your charts some trendlines and what looks like pivot point info so I suspect that's a key part of your methodology.
Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
Quote from romik:
I am still not sure which Hammer line that was
romik... the first 2 charts you posted are both 5-min charts.
And how did you buy at 1309.12? And sell 1/2 @ 1311.11?
I guess maybe these were typos?..
First I saw a dark candle on 3 min chart looking like a Bullish Dark Hammer, by the time it closed 13.24pm it was obvious to me that it hasn't formed the right shape, I noted the volume at the time 13,064 (3 min chart) which confirmed that there was sufficient support from the low of 1308.00. I decided to wait for the 5 min candle to close.
When the candle closed on 5 min chart 13.25pm it has taken shape of a Bullish Dark Hammer, the low was within 1.5 points from S1 level, the following candle showed some buying activity forming. I had T&S open and there were quite steady blocks going through hitting the Offer. That Hammer formation + increase in volume suggested that we are about to go out of the chop zone. ES has come down from the highs of 1316.25 down to 1309 level, and yes from my past observations/experience it was a sufficient retreat to start forming an upward move. I still decided to wait for a confirmation on a 15 min candle close.
15 min candle close @ 13.30pm confirmed formation of a Bullish Dark Hammer. RSI was below 30 and slightly raising upwards.
That's about it, apart from that, my stop was placed at 1 tick below the low of the Hammer (@ 1307.75).
Partly, I must admit, it was a gut feeling, that it was the right time to enter into a trade. I don't think there ever is a perfect time to enter into a trade as market behaviour is quite random throughout the day, looking at T&S prices that is, that affect formation of the price bars.
I am a bit surprised to hear that there was no Bullish Dark Hammer I'll keep re-reading this thread until I get it.
When the candle closed on 5 min chart 13.25pm it has taken shape of a Bullish Dark Hammer, the low was within 1.5 points from S1 level, the following candle showed some buying activity forming. I had T&S open and there were quite steady blocks going through hitting the Offer. That Hammer formation + increase in volume suggested that we are about to go out of the chop zone. ES has come down from the highs of 1316.25 down to 1309 level, and yes from my past observations/experience it was a sufficient retreat to start forming an upward move. I still decided to wait for a confirmation on a 15 min candle close.
15 min candle close @ 13.30pm confirmed formation of a Bullish Dark Hammer. RSI was below 30 and slightly raising upwards.
That's about it, apart from that, my stop was placed at 1 tick below the low of the Hammer (@ 1307.75).
Partly, I must admit, it was a gut feeling, that it was the right time to enter into a trade. I don't think there ever is a perfect time to enter into a trade as market behaviour is quite random throughout the day, looking at T&S prices that is, that affect formation of the price bars.
I am a bit surprised to hear that there was no Bullish Dark Hammer
I'll keep re-reading this thread until I get it.Quote from version77:
romik... the first 2 charts you posted are both 5-min charts.
And how did you buy at 1309.12? And sell 1/2 @ 1311.11?
I guess maybe these were typos?..
The 1st chart is indeed 3 minute chart on ES, just checked again.
As for the prices, you are right, it was a typo, 1309.25 and 1311.00.
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