Trading Hammers (revisited)
- Thread starter NihabaAshi
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NA, how quickly you move your stop to BE amazes me. Is it only a few ticks? Virtually in every chart where someone posted what would be a loss for them, you would say that you would already have moved your stop to breakeven anyway.
Not sure if you've read this entire thread (highly recommended) to ensure you don't miss any important info by me or others...
Then print out anything you think is useful.
When you do...you'll see that I'll talk in-depth about three particular Hammer Patterns and their respected sub-groups and some aspects of the trade management (stuff after the pattern signal).
Trade management is a huge area of discussion for me and I'm unwilling to go into such in this thread (in-depth).
I'll only mention a few things (hints) about such.
Thus, as mentioned already...
My initial stop/loss protection is based upon the price action that occurred prior to the Hammer Line and/or the price action within the Hammer Line itself.
However, here's something you really need to think about...
Placing your stop at/near the low of the Hammer Line is what I call a logicial stop...
A spot that most traders are aware there's a lot of stops in that area.
Another way of looking at it...its like putting a bullseye sign on your chest.
An area that's very susceptible to running the stops or pick pocketing before prices rebound and move upwards or before the appearence of another trade signal soon after getting stopped out for a loss.
My initial stop is outside that logical area and allows for me to be in a position to manage my contingency plans more efficiently especially when such appears prior to a stop being hit.
NihabaAshi
I trade different trading instruments.
Thus, that trigger price is different and particular to a trading instrument.
I've had some tell me its too soon (like you) and others tell me I waited too long.
Therefore, to keep it in perspective...if you were to use a similar type method...
I'm sure your trigger price will be different and based upon your trading style.
Last of all, not all those charts you made reference to were losses...
A few of them actually reached a PT1 prior to retracing back to any particular stop loss area that wasn't disclosed by the chart poster in the first place.
In addition...you and I both have had conversations together about some charts that did result as losers (no breakeven trade was triggered) and trades were reversed either upon the stop being hit for a loss or prior to the stop being hit while at a loss.
Thus, your statement that virtually in every chart is incorrect and I'm not sure why you would post something false like that...
I'll think about your agenda behind that statement later especially since you knew prior to the posting of losing pattern signals...
You knew my stops are not placed at/near the low of the Hammer.
You also knew I had prior discussed I use a trigger price method to tell me when to go to breakeven.
What you don't know is the specific ticks or points I use for each particular trading instrument.
I'll tell you my trigger price for one particular trading instrument...
ES is +1 point.
Thus, as soon as ES goes my way after entry by +1 point...
I go to breakeven.
Is that too fast or too slow for you ???
Please remember that if/when someone post an ES chart that would have been a loser had it retraced after moving +1 point in their favor...
Whereas for me...I would have been at breakeven price and will comment about such.
P.S. If you want me to post the direct links to those conversations with you in this thread...
Let me know and I'll pm them to you along with the direct links to the specific losing charts.
NihabaAshi
NA, please believe me my only agenda is to learn. I did not say "virtually all" because I had some other agenda. I only said it because it seemed like that to me - honestly. Maybe it's not virtually all, maybe it's "most" or "many". Your memory seems to be much better than mine.
For me moving your stop to BE after only 4 ticks in any instrument seems like extremely fast. I've never known of anyone moving stop to BE so fast. I think I would get a ton of breakevens like that.
i examined "hammers" with some other guy back when the original thread about them started.
it ended with the conclusion : hammers have no edge.
i noticed that different charting software or data sources display data differently so some might show hammers where others don't. also, each time frame has their own hammers which doesn't appear in a higher/lower time frame.
since the chance of you missing a hammer due to data/chart/timeframe glitch are random. hammers are random.
could be wrong. :eek:
it ended with the conclusion : hammers have no edge.
i noticed that different charting software or data sources display data differently so some might show hammers where others don't. also, each time frame has their own hammers which doesn't appear in a higher/lower time frame.
since the chance of you missing a hammer due to data/chart/timeframe glitch are random. hammers are random.
could be wrong. :eek:
Hi Remiraz,
Which Hammer sub-group was it that you couldn't figure out how to trade with an edge or couldn't find an edge ???
Since Hammers appear every trading day...
Can you post a chart example of the Hammer sub-group that you did not know how to trade ???
Hopefully you weren't trading one of the ones that aren't reliable that I've briefly mentioned in this thread or one of the ones a few have posted chart examples of in this thread that aren't reliable.
Simply, to bad you didn't raise your hand up instead of sitting silently in the back of the class and struggling with the material...
Especially if its material you shouldn't be trying applying via putting your efforts into the Hammer sub-groups that should be avoided.
I've already mentioned one particular sub-group I couldn't find an edge...
White Inverted Hammers.
However, just because I couldn't figure out how to trade it successfully doesn't imply all others out there will also find no edge...
With that said...post charts, post charts and post more charts...
Along with some rules of what you tested or traded.
Its the only way I or someone else can help you.
Without that...its just hot air showing up and saying it has no edge.
Simply, you could be right that they have no edge if you were testing one of the unreliable Hammer sub-groups or your trade methodology of trading Hammers was flawed.
We'll never know unless you provide some info.
Yet, I do remember a prior conversation with you in another thread in which you said the same thing about something else...
Something else you gave no further information about what you were doing.
NihabaAshi
It's a few.
A few of the losing charts posted by others including invalid Hammer patterns or ones I would have never been able to get an entry due to my Entry Signal method...
Would have resulted in a breakeven trade for me had I pretended (such was posted) it was a valid pattern signal (ignoring one of my rules that you have summarized) and/or pretended it was a valid entry signal.
Regardless...lets move on.
Look at it like this...
I would rather have a ton of breakeven trades or 1 tick profit trades instead of a ton of losing trades.
Now you can officially tell someone you have met a trader that uses a trigger price method that tells him its time readjust an initial stop/loss into a breakeven trailing stop or readjusting a breakeven trailing stop into a profitable trailing stop.
I thought most here at EliteTrader.com were using a method to tell them its time to readjust their stop as price continues moving in their favor.
With that said...
How many points would ES need to move in your favor to prompt you to go to breakeven or a profitable trailing stop ???
I have a friend that uses +2.50 points for ES...
However, he averages about 5 trades per week where he's up at least +2.25 points and then it retraces and takes him out for a loss.
That's a total of +11.25 ES points per week or +45.00 ES points per month...
Given back to the market...given back to another trader.
Points that would make him a profitable trader instead of a losing trader...each and every month.
NihabaAshi
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