Trading Hammers (revisited)

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Quote from cashmoney69:

NihabaAshi

Do you use indicators with your charts?, if so which ones? or do you just look at the candles?

- nate
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I'm a price action only trader (no indicators).

I only look at candles as a confirmation to what I already know or think I know.

Simply, if I don't understand the price action...I ignore Japanese Candlestick patterns.

However, prior to traversing from indicators to price action only trading many years ago...

Indicators (your usual stuff in any basic software package) were used for trading about 40% of my trades.

I eventually abandon indicators completely due to a natural transition (not intentionally) as I learned more about why price does what it does along with integrating that understanding into WRB Analysis.

I got nothing against indicators because it works for some but not for most.

Those that it works for...these are traders that have started to develop an understanding about the price action that's independent from indicators.

Eventually they too will traverse from indicators to price action only trading...

A natural process of gaining experience as each year passes by.

The next level of trading I would like to traverse to is to become more intuitive as a price action only trader...allowing me to be less dependent upon my rule based methodology.

However, intution trading isn't easy and usually it takes my rule based methodology to dig myself out of a hole that had occurred via intuition trading.

:mad:

Yet, as I learn more about another aspect of trading based upon volatility...

My intuition trading has improved a lot in the past year.

Mark
 
NihabaAshi,
great posts about the hammer pattern...
Well listen, this is my question.............Does it work on Equities and for a pullback startegy which with fib retracements...... see snapshot.

Note GG on the lowest level at around 17.50(beginning of the chart)
 

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Quote from rateesquad:

Sorry, what kind of indicators do you use with the candles???
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Hi rateesquad,

You should read my prior post dated 04-17-06 08:39 PM...especially the very first sentence.

Quote from rateesquad:

...Does it work on Equities and for a pullback startegy which with fib retracements...... see snapshot.

Note GG on the lowest level at around 17.50(beginning of the chart)
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I don't know because I don't trade Equities nor do I monitor their price action in realtime.

However, hammer patterns are very dynamic in that they can occur counter-trend, trend reversal or trend continuation.

By the way, I don't see any valid Hammer patterns on your chart via what I'm discussing in this thread.

Why did you post it or do you have your own candlestick pattern that's visable on the chart???

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
 
Quote from NihabaAshi:



I got nothing against indicators because it works for some but not for most.

Those that it works for...these are traders that have started to develop an understanding about the price action that's independent from indicators.

Mark
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I thought indicators were just another way of viewing price action..making it easier to predict a move?. With that being said, I would have thought that indicators would work for most traders, even though most may decide not to use them.

- nate
 
Quote from cashmoney69:

I thought indicators were just another way of viewing price action..making it easier to predict a move?. With that being said, I would have thought that indicators would work for most traders, even though most may decide not to use them.

- nate
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Indicators are distractions. Not trying to be sarcastic, but why bother? If you understand how to read the price action, why put a lot of stuff at the bottom of the chart to have to also try to take into consideration? Some of the charts I see posted here on ET are quite amusing.
 
Quote from BSAM:

Indicators are distractions.
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Try telling that to Woodie. He thinks price is a distraction...

Why look at price when the CCI is telling you what price is doing...:p
 
Quote from cashmoney69:

I thought indicators were just another way of viewing price action..making it easier to predict a move?. With that being said, I would have thought that indicators would work for most traders, even though most may decide not to use them.

- nate
More...

Hi Nate,

I will try to conclude this discussion about indicators into Hammer patterns to prevent this discussion from being off-topic.

First of all, I don't like to use the word predict.

I prefer to use a words like probability, tendency et cetera.

Prior to this Hammer thread...there's a common theme in some of my market discussions...

Psychological aspects of trading, position size management, market seasonal patterns, intraday tendency patterns, key market events et cetera.

Price action only trading has more of a tendency to incorporate the above into ones trading plan in comparison to trading via indicators.

The above is based upon my past experience with indicators and based upon the experience (past and current) of those I socialize with that use indicators as their trading plan.

I can't speak for anyone's else experience with indicators but I can talk about my own experience and the experience of those I closely socialize with.

For example...position size management is one of the most important aspects of my trading plan.

Price action only trading embraces this well in comparison trading via indicators.

Also, as a price action only trader...I'm more in tuned with current issues that have impact on the market.

Whereas trading via an indicator made me too focus on the indicator (tunnel vision) instead of staying in tuned with current market events that were the catalyst or precursors to price action in the futures or derivatives markets.

Regardless, if your a price action only trader or a trader that uses indicators...

If it works (consistent profits)...keep using it.

Now...in regards to Hammer patterns...indicators tend to lag the price action of Hammer patterns and I think it has something to do with the abrupt change in the supply/demand that's shown in those long shadows.

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
 
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