Trading Hammers (revisited)

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NA, maybe this has been addressed before, but do you watch time and sales? I've noticed that when watching candle formation and time and sales is that an out of sequence, late print (or a bad print) will occur that is some distance away from the current bid/ask. This can be for as few as 100 shares. What you end up with is a candle that has the appearance of a hammer, but really isn't. How do you deal with this?
 
Quote from trendo:

NA, maybe this has been addressed before, but do you watch time and sales? I've noticed that when watching candle formation and time and sales is that an out of sequence, late print (or a bad print) will occur that is some distance away from the current bid/ask. This can be for as few as 100 shares. What you end up with is a candle that has the appearance of a hammer, but really isn't. How do you deal with this?
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First, I don't do any tape reading and when I've tried...I'm not good at it. :(

Thus, its not part of my trade methodology.

Yet, depending upon your data provider...

One data vendor may show a white hammer...another shows a dark hammer and another shows a long legged doji.

I've actually seen this occur in realtime while talking to other traders while we all used a different data vendor.

How do you deal with such...

Remember when I said in this thread in my very first post...

...I do not recommend using candlestick analysis all by itself and it should be only used as a confirmation to what you already know or believe is occurring in the the current price action.
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Simply, no matter what the candlestick pattern is...

The price action will still have the same reasons.

However, you said will have the appearence of a Hammer.

It's either a valid Hammer pattern or not.

Yet, if your talking about data vendor problems or have consistent questionable data vendor errors producing false candlestick patterns or your missing pattern signals...

You need to either get a new data vendor or stop using candlestick analysis.

NihabaAshi
 
sunnyskies,

Here's a hint about another criteria involving the Dark Inverted Hammer Pattern sub-group reversal signal...

Look at all the charts I've posted about the Dark Inverted Hammer Patterns...

In those charts...study the interaction of the long upper shadow of the dark inverted hammer line with the prior interval bodies.

Then compare my charts to your charts and you'll see a huge difference.

If you can't see any difference...let me know.

NihabaAshi
 
September 1st Thursday

CBOT mini-sized Dow - YM

Bullish White Hammer Pattern
sub-group: reversal signal

Not much to say about this other than a topic I will soon discussed called candlestick blending.

This topic should be useful for those only monitoring one or two chart intervals but don't want to miss trade signals that may be occurring on other chart intervals.

The attached YM chart is via the 2min chart interval.

However, had someone been using the 1min chart interval...

Candlestick blending of the 1min chart interval while not having a 2min chart on their monitor would have told them there was a White Hammer Line on the 2min chart that needed further investigation.

This allows me to be more effective in using my monitors workspace without having to go buy more monitors.

That investigation would have discovered a valid Bullish White Hammer Pattern via the 2min chart...

A trade opportunity not missed had someone been fixated on the 1min chart interval.

If you look at your YM 1min chart interval you'll the two 1min intervals that produced the Hammer line on the 2min chart.

Anyways...as I said I will discuss such soon.

NihabaAshi
 

Attachments

Quote from sunnyskies:

Dark Inverted Hammers posted by NA:

http://www.elitetrader.com/vb/attachment.php?s=&postid=805475

http://www.elitetrader.com/vb/attachment.php?s=&postid=806171

http://www.elitetrader.com/vb/attachment.php?s=&postid=812656

http://www.elitetrader.com/vb/attachment.php?s=&postid=815482

http://www.elitetrader.com/vb/attachment.php?s=&postid=817708

http://www.elitetrader.com/vb/attachment.php?s=&postid=818015
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Hi sunnyskies,

Did you figure out the difference between how the dark inverted hammer long upper shadow on my charts interacted with the prior candlestick bodies in comparison to the long upper shadows on your charts of dark inverted hammers ???

NihabaAshi
 
I'm studying them. Meanwhile, I got a concern about the first chart listed. It seems that you posted it as a valid pattern while one of the rules seems to be violated. Check out the picture.
 

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