Yes...its a trade signal I like to trade but its price action is not via a Hammer pattern.
NihabaAshi
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Trading Hammers (revisited)
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Yes...its a trade signal I like to trade but its price action is not via a Hammer pattern.
NihabaAshi
August 17th Wednesday
Eurex DAX and Euronext CAC40 Futures
Bearish Dark Inverted Hammer
DAX did not have a confirmed pattern signal (bearish reversal) because the high of the dark inverted hammer was < high of the white WRB.
However, via the price action in the CAC40 that had a confirmed pattern signal (bearish reversal signal)...
A sister trade in the DAX would have been valid especially if you don't trade the CAC40 and only use its price action to help trade the DAX when the DAX doesn't have a trade signal.
NihabaAshi
Eurex DAX and Euronext CAC40 Futures
Bearish Dark Inverted Hammer
DAX did not have a confirmed pattern signal (bearish reversal) because the high of the dark inverted hammer was < high of the white WRB.
However, via the price action in the CAC40 that had a confirmed pattern signal (bearish reversal signal)...
A sister trade in the DAX would have been valid especially if you don't trade the CAC40 and only use its price action to help trade the DAX when the DAX doesn't have a trade signal.
NihabaAshi
Attachments
Quote from ransome3000:
August 17th 2005 Wednesday
CME Emini - ES
This is what I see in the attached chart.
I like your White Inverted Hammers 1 and 3 in your chart.
However, I consider Hammer 3 to be a White Shooting Star because its body is above the bodies of all the candlesticks between it and the White WRB.
I had a lot of problems in the past with White Inverted Hammers and came to the conclusion they weren't reliable via how I was approaching them and my trade management didn't work well with them either.
Yet, that was then and for the past 5 years or so I've been using a compeltely different trade management rules...
Maybe its time I revisit them again (a late fall project because I have too much other stuff on my plate that needs to be finished).
NihabaAshi
I'm not seeing how hammer 1 or 3 (shooting star) engulfs the prior bodies?
Look like #1 engulfs one prior body, and hammer #3 engulfs zero prior bodies?
Am I missing something?
Look like #1 engulfs one prior body, and hammer #3 engulfs zero prior bodies?
Am I missing something?
Quote from jasonbraswell:
I'm not seeing how hammer 1 or 3 (shooting star) engulfs the prior bodies?
Look like #1 engulfs one prior body, and hammer #3 engulfs zero prior bodies?
Am I missing something?
Ransome is using a different set of criteria from me via what I can see in the price action of his charts.
Also, he's interested in White Inverted Hammers which is something I stopped trading and stopped monitoring many years ago.
Currently I do not have a trading plan for trading it.
The only thing I see that doesn't match the criteria he stated is in White Inverted Hammer 1.
One of the rules states...
Long upper shadow engulfs prior two bodies
However, in the chart example via White Inverted Hammer 1...
I only see just one body being engulfed...not two.
However, for me in that particular price action as a bearish reversal signal...
I would only require just one of the bodies between the White Inverted Hammer and the White WRB to be engulfed.
Something else I would like to see that wasn't occurring in the price action for that White Inverted Hammer 1...
I would like to see the body that's being engulfed by the White Inverted Hammer 1 to be above the Close of the White WRB.
Simply, if it was a white line that got engulfed...
I would like to see the Open of the White Line > or = to the Close of the White WRB.
If it was a dark line that got engulfed...
I would like to see the Close of the Dark Line > or = to the Close of the White WRB.
That particular rule would help ensure some Longs are feeling a lot more heat (pressure) from the engulfing price action of the White Inverted Hammer after chasing that White WRB.
This will make it easier for them to think they chased it and that they should minimize their losses by dumping into the price action in the intervals after the White Inverted Hammer.
Whereas in ransome chart example...that White Line being engulfed had its Close = to the Close of the White WRB.
Not as much heat (pressure) being put on them Longs to sell.
Regardless, that large Dark WRB that formed after the White Inverted Hammer 1 was a big pt1 (profit target) for Shorts to cover into.
White Hammer 3...I don't see any prior intervals having their bodies engulfed and the body of that White Inverted Hammer was above the Close of the White WRB...
Reason why I classified it as a White Shooting Star and not a White Inverted Hammer.
Will post a chart later...gotta go...toddler wants to play a quick game of touch football.
NihabaAshi
Quote from jasonbraswell:
I'm not seeing how hammer 1 or 3 (shooting star) engulfs the prior bodies?
Look like #1 engulfs one prior body, and hammer #3 engulfs zero prior bodies?
Am I missing something?
Thanks for pointing it out. My mistake. I supposed to mean 'Greater than' but not 'engulf' the prior bodies.
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August 18th 2005 Thursday
CME Emini - ER2 10 Min
Attached a chart showing an Invalid Dark Inverted Hammer (imo) and I have one question:-
1) How do you define a White or Black WRB in different interval? In the chart example, I would take 0.8 or 0.9 pts body as small in 10 min interval.
Attachments
Quote from ransome3000:
CME Emini - ER2 10 Min
Attached a chart showing an Invalid Dark Inverted Hammer (imo) and I have one question:-
1) How do you define a White or Black WRB in different interval? In the chart example, I would take 0.8 or 0.9 pts body as small in 10 min interval. [/B]
Hi ransome3000,
Wide Range Bodies (WRBs) can be defined many ways from one trader to the next.
Here's my definition:
Body > Each bodies of the prior three intervals
I like the number 3 and I wouldn't recommend going below the number.
Thus, the number 4, 5, 6, 7 is just as good but will produce less trade signals.
The wider the WRB...the more it represents a shift in supply/demand.
WRBs also represents volume.
Such is very useful when trading something like Forex Currencies.
WRBs also represents current s/r levels.
Therefore, as you noted on your chart that those aren't long white lines...
http://www.elitetrader.com/vb/attachment.php?s=&postid=819556
They are not WRBs.
NihabaAshi
I think you explained once how you derive your targets but it's still like voodoo to me.
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