Quote from ransome3000:
August 29th 2005 Monday
CME Emini - ESU05 10 Min
I spotted this Bearish Hammer and placed a limit order at its open 1207.25 to sell. The price then went down to 1026.25 without filling my price. I then cancelled the limit order.
NihabaAshi, would you trade this signal or you think this is not a valid signal or you think its valid but for some reason, you wouldnt trade? My justification for this Bearish Dark Inverted Hammer is as follows:-
1) There is a White WRB.
2) Its upper shadow engulfs the prior body.
For live recording, what time frame and how many charts in a window will you recommend?
No...its not a Bearish Dark Inverted Hammer pattern signal that I would trade.
(see my annotated chart attachment of your chart)
* Compare the Dark Inverted Hammer (sub-group reversal signal) to the most
recent white WRB.
I believe you were comparing it to the WRB annotated as white WRB 1 instead of to the one annotated as white WRB 2.
Also, WRB's represent a shift in supply/demand and/or candlestick s/r levels.
Thus, the Open of the white WRB represents temporary support.
More importantly...another criteria is the following...
* Any intervals between the white WRB and Dark Inverted Hammer...
If the intervals have a long lower shadow...that long lower shadow must not test (equal or less than) the Open of the white WRB.
In your chart example...the interval between the white WRB 2 and the Dark Inverted Hammer had a long lower shadow and it tested the Open of the white WRB 2.
Therefore, its
not a valid trade and its a trade that has found some support...
Enough support to possibly encourage buyers to step to the plate and drive prices higher.
Thus, the long lower shadow that bounced off its own lows of its interval and at the same time it bounces off the Open of a white WRB...
Not a good time for Shorts to be hanging around (pun intended).
However, the criteria about the long lower shadow that's not allowed to test the Open of the white WRB...
Only applies to the sub-group
reversal signal and not to the sub-group
continuation signal.
As for chart intervals...I follow different chart intervals.
Just pick any interval your comfortable with but make sure its more than one chart interval to reduce the odds of missing Hammer pattern signals.
However, if your going to get fixated on one chart interval only...
Learn about candlestick
blending or
de-blending to allow you to
visualize more than one chart interval eventhough your actually only using one chart interval.
I'll talk about blending and de-blending later in this thread.
Until that discussion occurs...here's a decent generic source (located at the lower part of that webpage):
http://www.stockcharts.com/education/ChartAnalysis/candlesticks4.html
As for how many charts you want to record...I can't make any recommendations because that's entirely dependent upon how many monitors you have and how quickly you can process information as efficient as possible without getting
information overload...
It's also dependent upon how powerful of a computer you have (ability to handle Camtasia without letting it eat up your CPU).
Simply, if you can only handle watching 4 charts on one monitor...
Your not going to learn how to see trade signals occur in realtime nor develop a feel for the price action in realtime if your recording 16 charts on 4 monitors.
With that said...if you have the ability to monitor 16 charts on 4 monitors...
Go for it.
NihabaAshi
