There are different patterns discussed in this thread and the ones I've been discussing are not similar to the PIN bars.
However, you can post a chart and show what you consider to be the specific commonalities.
Mark
Trading Hammers (revisited)
- Thread starter NihabaAshi
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There are different patterns discussed in this thread and the ones I've been discussing are not similar to the PIN bars.
However, you can post a chart and show what you consider to be the specific commonalities.
Mark
Hi romik,
Thanks for the chart of your trade signal on Dec 18th Mon.
However, it's not one of the Bullish White Hammer sub-group I'm discussing in this thread.
Yet, it is another Bullish White Hammer sub-group.
With that said, even though this isn't a Bullish Hammer pattern I trade...I do like the price action that it was involved within.
Take a look at your 30min chart for Dec 15th Friday and you will see a valid Bullish White Hammer pattern that I'm discussing in this thread that completed its formation @ 1:50pm est for the EuroFX EC (sister price action for EurUsd).
Although that yielded some nice profits for those that traded it via reaching a WRB pt4 level on Dec 18th @ 0850am est...it produced something I've discussed many times in this thread.
Valid pattern signals are excellent sources for support/resistance zones for tomorrow's price action.
The s/r zone for that White Hammer Line is the length of the lower shadow.
Also, the only time I use the body of the hammer line as part of that s/r zone if their were large prints involved in the formation of that body in comparison to the formation of the long lower shadow.
That key s/r zone becomes a key market day for EuroFX EC, EurUsd or the inverted price action of the U.S. Dollar.
It setup nicely what occurred in the bounce off the lows of Dec 18th Mon @ 1050am est even though there's no valid Hammer patterns off those lows.
You should also notice that Long Lower Shadows were involved in the bounce off the lows on Dec 18th.
The key here, as mentioned many times in this thread, is to understand the price action prior to any candlestick pattern formation.
Simply, look for other pattern signals to develop within key s/r zones...
S/R Zones formed by prior key pattern signals.
Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
Greetings Mark,
Another attempt: firstly, does the bullish dark hammer indicated just before 3 pm qualify under your rules &, secondly, if it does would you have entered the market even though the body of the white WRB is not overlapped by the following bar?
Thank you for your time.
John G
Another attempt: firstly, does the bullish dark hammer indicated just before 3 pm qualify under your rules &, secondly, if it does would you have entered the market even though the body of the white WRB is not overlapped by the following bar?
Thank you for your time.
John G
Hi John, I don't see your chart.
When you post the chart, please ensure you've annotated on the chart exactly where the Bullish Dark Hammer pattern is at.
Thanks.
Mark
Yes, that's a valid Bullish Dark Hammer pattern on the NDX.X Index chart you've annotated around 3pm.
As for my entry method, I use a chase range in which I'm allowed to chase the price a particular number of ticks (just a few).
Therefore, my answer is YES in that I would have entered the market.
With that said, I'm assuming you would have (I would have) switched to the Emini Futures NQ chart or the QQQQ for a trade due to the Bullish Dark Hammer in the NDX.X
This is another good example of why traders of futures should not get tunnel vision.
In this example of your NDX.X chart...if someone is trading either NQ Emini of the QQQQ...they should also be following the NDX.X and Nasdaq 100 Composite charts for pattern signals just in case there's no pattern signal in NQ or QQQQ.
In fact, one particular month I was curious about the frequency of pattern signals if I was following my trading instrument and its respect Index.
I had 23% more pattern signals...more opportunities.
Kind'uv like more eyes on the market sort'uv speak.
Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
Hello,
I've been following this thread over the weekend. It's a long weekend here with the Chinesse New Year thing in Hong Kong. Please comment on the attach file. I think it looks like your description for the white hammer pattern, continuation pattern with at least 3 bars between the last green WRB and WH. Too bad it failed.
Apart from that, I don't think the hammer patterns work really well in HK. From what I've seen so far (White hammer pattern and dark bullish hammer pattern, still working out my understanding of inverted dark hammer pattern), the ups and downs are too extreme. The stops are too wide, as someone mentioned before, in regards to the profit target. From what I've experienced, momentum and break-outs are the way to go for trading the HK futures.
I think these hammer patterns would really work well on the mini S&P 500 futures in states though. Too bad I stopped trading them a while back. Couldn't handle much of the time differences after 2 years living like an owl
I'll try to post more charts later if I see anymore of those hammer patterns in the HK. In the meantime, I hope someone starts more discussion on the dark inverted hammer patterns. The dark inverted hammer patterns requirements are not so clearly disclosed as much as the two previous patterns. I'm anxious to see if these hammer patterns can be found and apply to HK futures.
Anyway, wish you all traders good fortune and more profits in this new boar year.
ycw
I've been following this thread over the weekend. It's a long weekend here with the Chinesse New Year thing in Hong Kong. Please comment on the attach file. I think it looks like your description for the white hammer pattern, continuation pattern with at least 3 bars between the last green WRB and WH. Too bad it failed.
Apart from that, I don't think the hammer patterns work really well in HK. From what I've seen so far (White hammer pattern and dark bullish hammer pattern, still working out my understanding of inverted dark hammer pattern), the ups and downs are too extreme. The stops are too wide, as someone mentioned before, in regards to the profit target. From what I've experienced, momentum and break-outs are the way to go for trading the HK futures.
I think these hammer patterns would really work well on the mini S&P 500 futures in states though. Too bad I stopped trading them a while back. Couldn't handle much of the time differences after 2 years living like an owl
I'll try to post more charts later if I see anymore of those hammer patterns in the HK. In the meantime, I hope someone starts more discussion on the dark inverted hammer patterns. The dark inverted hammer patterns requirements are not so clearly disclosed as much as the two previous patterns. I'm anxious to see if these hammer patterns can be found and apply to HK futures.
Anyway, wish you all traders good fortune and more profits in this new boar year.
ycw
Quote from gober:
Hello,
I've been following this thread over the weekend. It's a long weekend here with the Chinesse New Year thing in Hong Kong. Please comment on the attach file. I think it looks like your description for the white hammer pattern, continuation pattern with at least 3 bars between the last green WRB and WH. Too bad it failed.
Apart from that, I don't think the hammer patterns work really well in HK. From what I've seen so far (White hammer pattern and dark bullish hammer pattern, still working out my understanding of inverted dark hammer pattern), the ups and downs are too extreme. The stops are too wide, as someone mentioned before, in regards to the profit target. From what I've experienced, momentum and break-outs are the way to go for trading the HK futures.
I think these hammer patterns would really work well on the mini S&P 500 futures in states though. Too bad I stopped trading them a while back. Couldn't handle much of the time differences after 2 years living like an owl
I'll try to post more charts later if I see anymore of those hammer patterns in the HK. In the meantime, I hope someone starts more discussion on the dark inverted hammer patterns. The dark inverted hammer patterns requirements are not so clearly disclosed as much as the two previous patterns. I'm anxious to see if these hammer patterns can be found and apply to HK futures.
Anyway, wish you all traders good fortune and more profits in this new boar year.
ycw
Hi gober,
Wish you a good year.
I've attached my own 2min chart of the Hang Seng HSI futures.
(Note: Your chart is difficult to see because its very small).
My chart clearly shows it's not a valid White Hammer pattern because it didn't meet the qualifications about what it must do to be valid for those particular situations when the White Hammer Line occurs after three consecutive declining dark lines (see earlier commentary in this thread about this unique price action).
http://www.elitetrader.com/vb/attachment.php?s=&postid=1365752
However, lets pretend it is valid and you took the entry.
As mentioned a few times in this thread about NEVER take a trade if you don't have a contingency plan.
Another way to look at it...if you don't have a contingency plan to profit from a failed pattern...
That's a trade you should have never opened in the first place.
What's your contingency plan(s)?
Also, don't take the trade if you don't know what triggers you to move your initial stop/loss into a profitable trailing stop when trading Bullish White Hammer Patterns.
I know someone (a HSI trader) that uses a +12-20 point price area that the position must reach in profits to prompt him to move his initial stop/loss into a profitable trailing stop in case it retraces against him.
I think he sets his profitable trailing stop at 3 ticks above his entry price.
In fact, many traders I've met that have problems with Japanese Candlestick patterns is because of their trade management after entry.
Simply, map out your trade from entry to exit prior to opening a trade position.
In addition, the few guys I do know that apply particular Hammer patterns to the HSI...they work well.
The question now is what type of Hammer's are you trading and does your chart represent one of those sub-groups?
If so, can you share the rules (criteria) about the Hammer pattern your trading (pm me if you want to keep it private).
As for your reference to that someone in this thread about wide stops.
I know who your talking about and that's a trader that doesn't know how to reduce his risk exposure for those times when the stop is wide.
I gave that trader one particular suggestion in this thread about how to manage the increased risk exposure if the stop is too wide.
It's simple, reduce your position size when the stop is too wide and trade your normal position size when the stop is within a tolerable area for you.
With that said, I highly recommend you write down all the rules for each Hammer pattern I've discussed in this thread especially since your chart example is not a valid according to my chart when you thought it was valid.
Once again, thanks for the chart and please post more charts along with questions.
Mark
I don't know what your stats are but here's a brief summary of the most recent price action of the Hang Seng HSI futures via the 2min through the 60min chart.
* 17 valid Bullish White Hammer patterns
* 4 failed patterns (initial stop/loss reached before either reaching a WRB pt1 or a trigger price to prompt moving the initial stop into a profitable trailing stop)
* 1 questionable trade (loss or profit depending upon the entry)
* 2 contingency plans activated of those failed patterns that resulted in 2 profitable short positions that reached profit levels to erase the prior losing hammer trade
* 12 of the 17 bullish white hammer patterns reached a WRB pt1 profit level (12 profitable results out of the initial 17 pattern signals).
* 5 of the 17 profitable bullish white hammer patterns reached a WRB pt3 level and beyond (big profits).
* Some had wide stops while others did not have wide stops...depending upon your definition of a wide stop.
If your recent stats aren't similar, I highly advise for you to re-read this thread and to write down the rules (criteria).
With that said, I've attached a particular 30 min chart because it represents a few things I mentioned in my prior post to you.
There were two profitable Bullish White Hammer patterns...both reaching a WRB pt1 level.
However, see the first BWH on Feb 7th Weds, pretend it didn't reach that WRB pt1 and lets pretend it retraced with you still in the trade when that contingency plan appeared (I've discussed in-depth in this thread that particular contingency plan)...
Pretending its a losing position, you reverse the Long position into a Short position.
The Gap down at the Open the next trading day is a WRB pt1.
As the HSI continues downwards, it reaches a WRB pt2 around 20416.
Now, the actual WRB pt2 formed around 20525 with plenty of time remaining in that particular 30min interval.
Not shown on the chart is a key s/r zone.
Simply, if you had contract remainders after covering some of that Short at the WRB pt1...that key s/r zone if a good cover area for the remainders as the HSI reached the s/r zone.
Lets take a quick look at the second Bullish White Hammer pattern on Feb 12th Monday that resulted as a profit as shown on the chart.
Remember a few times in this thread I said that Bullish White Hammer patterns also behave as key s/r zones?
Now take the range of that White Hammer Line from the bullish pattern and look at the price action that developed afterwards within that range.
(Do the same for the BWH on Feb 7th Weds).
Anytime I get a pattern signal within a s/r zone...I tend to either do one or two of the following:
* Increase my position size
* Hold profitable trades much longer beyond a WRB pt2 level.
* ADD to the position, within the s/r zone, if my initial entry was below my normal position size.
Yet, no pattern signal developed within the s/r zone of that Bullish White Hammer pattern on Monday.
I just wanted to show that regardless if a valid Bullish White Hammer pattern is profitable or fails...
You can still exploit its price action long after the Bullish White Hammer pattern.
Useful information (s/r zones) for someone that trades breakouts or fades breakouts.
P.S. Based upon what I said above about s/r zones...guess where the s/r zone is on the below prior chart I posted in my first reply to you.
Do you see what the price action did later around 1436hrs?
http://www.elitetrader.com/vb/attachment.php?s=&postid=1365752
Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
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