Trading Hammers (revisited)

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Quote from Medveshonok:

Hi, NihabaAshi.

Great thread, thanks.

I want to receive a PM too :)
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Hi NihabaAshi

Can I get some of that too?

Thanks in advance.

Daniel
 
NA, I know you're asking these to make me learn more and for my own good, and I'm thankful for that. My current interest is mini-Dow and EURUSD spot rate. I currently dont have my charts setup so cant take up that yet.




Quote from NihabaAshi:

As you probably already know via seeing me discuss it dozens of times here at ET...

I don't use nor recommend the use of fixed initial stop/loss protection.

What I mean is this...many traders use fixed stops based upon whatever reasons.

Example is 1.00 point stop in ES.

No matter what time of day and no matter what type of trading day it is...

They are using a 1.00 point stop in ES.

The flaw with this is that a fixed stop assumes the price action is always the same...from one trading day to the next.

This is far from the truth.

The market (it's price action) and the reasons behind the price action is different every trading day.

That reason alone is why I use initial stop/loss protection based upon current price action at the time of the trade signal or at the time of the entry signal.

There are many ways of doing this that's been discussed by others at ET.

Here's one particular way I do such...

First I decide what is the key support level (a specific price) below the closing price of the Hammer Line.

In that particular price action for the ES chart in question...

I changed the 5min interval to a 10min interval to look for any prior long lower shadows that hadn't been filled in by the price action that followed it.

Had I not found one on the 10min chart...I would have gone up to the next interval...15min and so on until I found a long lower shadow that had not had its area filled in by the price action that followed that particular interval.

In the ES chart...I found one on the 10min chart and it occurred back on July 21st via the 10min interval that opened at 1450pm est an closed at 1500pm est.

The low of that interval is 1228.00

I like to place my stop 1-2 ticks below the support price I find.

In this case for ES...1227.50

As I mentioned earlier in this thread...

If the stop/loss protection is too much for me to bite on...

I either don't take the trade or I reduce my contract size to a level where I have suitable risk control.

That 1227.50 would have been a suitable risk for me in that particular price action.

Although you didn't answer my prior question...

Here are my questions for you (please don't ignore it)...

* What are your trading instruments ???

* Did you see any Hammer Lines today in your trading instrument or on the day you choose to respond to this question ???

NihabaAshi
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Hi Nihaba

Looking at taking this trade within the next two to four days. Will wait to confirm support at its current level with support being a long term support line and the 70dma.

Its currently retraced (in my view) after showing some divergence in MACD and now I think that buy signals are being shown. Is this a signal that you are talking about?

This is a stock in Australia.
 

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Quote from BrooksRimes:

What do pt1 to pt5 stand for?

Thx.
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As mentioned in prior Trading Hammer thread...

PT info on my charts are Profit Targets based upon wide range bodies.

NihabaAshi
 
Quote from DTM:



This is a stock in Australia.
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I believe Nihaba doens't like to comment on stocks... This might
be mentioned in his first post in this thread... :)
 
I don't understand why all of us don't have all of these previous posts memorized. :D

Quote from version77:

I believe Nihaba doens't like to comment on stocks... This might
be mentioned in his first post in this thread... :)
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Quote from version77:

I believe Nihaba doens't like to comment on stocks... This might
be mentioned in his first post in this thread... :)
More...

Yep...

I don't trade stocks nor do I monitor their price action in realtime nor via live-recordings (very critical for my analysis).

Reason why I mention that if someone wants to discuss Hammer patterns in stocks...

I strongly recommend they post a chart just in case other stock traders are reading this thread and can offer their perspective on the pattern especially if they trade that particular stock.

NihabaAshi
 
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