Quote from Joman:
Thanks for your reply.
I've added the axis (Paris time) and used an other format so I hope it will be better !
I do understand the importance of market context and the difference between a line and a pattern.
But strictly speaking about the pattern, what is wrong ? the previous red bars, the preceding dark hammer line ... ?
Maybe, I should explain what I'm trying to do.
I'd like to code the 3 patterns you explained in this thread, scan the market (FX and maybe stocks at a later stage) and decide if the pattern is worth a trade considering market context.
I already do that with other patterns cause I prefer coding and working on new strategies and be alerted whenever a possible setup happens.
I'd be more than happy to share the code with you if you want to help me (I use amibroker).
Yeah, its a white (green) hammer line but not a valid white (green) hammer pattern.
What's wrong with the pattern ? As stated earlier in this thread, those consecutive preceding dark (red) lines killed the pattern. Essentially, forcing the price action after the white hammer line to do something bullish and forcing the white hammer line itself to close a little higher (review the rules about such that you've learned so far in this thread)...that price action afterwards stayed bearish.
By the way, thanks for your explanation about the coding. Therefore, the following commentary is not aimed at you. It's aimed at those that may be reading this thread and forgotten what I've said about coding of Japanese Candlestick patterns.
Its EASY to code Japanese Candlestick patterns and I'm not interested in coding because I can easily identify them in real-time. I do not recommend using Japanese Candlestick patterns alone and coders will often forget such. Japanese Candlestick patterns were not designed (originated) to be used as such. Simply, most coders will be tempted to use coding of candlestick patterns for trading purposes instead of for "identification purpose" only during their learning process.
Note: I tried the coding route earlier in my trading career. It distracted me from learning how to trade because I failed to ensure everything else in my trading plan was setup.
Therefore, if someone is having problems identifying them, most likely its because that trader is trying to learn too many of them instead of just trying to learn only one until he/she mastered it. As stated, coding can help in the identification process of candlestick patterns until they've learn how to do such without coding and in real-time without any hindsight analysis.
Further, just to clear, a trader should already know the market context, market direction
prior to the appearance of any type of trade signal. Thus, candlestick patterns are just entry signals to tell you when to enter that market direction. Simply, candlestick patterns are just 1/3 of the puzzle and I highly don't recommend trying to apply them alone without the other key components that are more important.
) seemed legit, that's why I'm asking.
