Trading Hammers (revisited)

Status
Not open for further replies.
NihabaAshi,

In your earlier illustration of the types of hammer you are dealing with you gave a graph [812656] for a dark inverted ham. - bearish trend continuation. There appears to be twelve candles contained in the area marked 'bearish price action.' As this is a considerably larger amount than in the other examples would you please advise whether this is the norm for this particular setup. May I take this opportunity to thank you in hopeful anticipation of your response & for such an interesting thread.

John G
 
Quote from jeg:

NihabaAshi,

In your earlier illustration of the types of hammer you are dealing with you gave a graph [812656] for a dark inverted ham. - bearish trend continuation. There appears to be twelve candles contained in the area marked 'bearish price action.' As this is a considerably larger amount than in the other examples would you please advise whether this is the norm for this particular setup. May I take this opportunity to thank you in hopeful anticipation of your response & for such an interesting thread.

John G
More...

Hi John,

The bearish dark inverted hammer continuation pattern tends to have more intervals between the White WRB and the Dark Inverted Hammer in comparison to the reversal version.

Also, some clues or hints I look for prior to any type of continuation pattern regardless if its Japanese Candlesticks or some other form of price action only trading is that when prices pullback down into the price area of the lows of that White WRB...

You will start to see several small real bodies with either a long upper shadow or long lower shadow or both long shadows.

Those are critical clues to start preparing for a possible trade signal including failed bullish candlestick patterns.

Yet, to answer your question more directly...

I really don't keep track of the number of intervals that occurs between the White WRB and the Dark Inverted Hammer for either the reversal or the continuation sub-groups...

Just a good guess that there's more intervals involving the continuation sub-groups.

NihabaAshi
 
Quote from Joe19314:

what about this >Bullish Dark Hammer Pattern< ?

I also saw s/r line from yesterday in 15' at 10360.

Joe
More...

Yes...that's a valid Bullish Dark Hammer pattern sub-group but not via the sub-group I'm discussing in this thread.

Simply, there are lots of different sub-groups of the Bullish Dark Hammer pattern (most are unreliable) and I'm only talking about just one of the reliable ones in this thread.

If you don't know the rules of what's been posted so far...your going to need to review the thread very carefully and write them down.

Yet, you could always wait (if you don't feel like doing it yourself) until I do another summary prior to getting heavy into this thread again.

NihabaAshi
 
Quote from Joe19314:

OK, Ni,

what about this >Bearish continuation Signal< here ?

Joe
More...

Do me a favor so that I know for sure your actually applying the rules and not taking guesses...

Summarize the rules as stated in this thread for that particular Bearish Dark Inverted Hammer continuation sub-group...

Then make a cheat sheet with boxes for yourself to put a mark within to tell you that rule has been met.

If all the rules are checked off on your sheet...

Then you don't need to ask me if its a valid pattern...

You'll know its a valid pattern.

However, if your having problems with a particular criteria...

Please ask a direct question about that particular criteria.

With that said...the following was something I stated last month about one of the rules...

Quote from NihabaAshi:

09-17-05 02:23 PM

...My Bearish Dark Inverted Hammer reversal signal...

* High of the DIH > High of the White WRB.

Whereas the Bearish Dark Inverted Hammer continuation signal...

* High of the DIH < High of the White WRB

However, for the continuation signal, I will sometimes use a High of DIH < or = Close of the White WRB if the White WRB has a long upper shadow...
More...

Now...in your Eurex - DAX chart...

The High of the Dark Inverted Hammer (DIH) is < High of the White WRB.

Someone once asked me via pm when do I apply the following...

* High of the DIH < or = Close of the White WRB

Usually when the Close of the DIH is below the Open of the White WRB.

With that said...your DAX chart is valid via what I'm discussing in this thread.

NihabaAshi

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=879636>
 

Attachments

Hi NH,

A while ago you briefly touched on sister trading instruments.

I was wondering how that works in the placement of stops.

Say you get a signal to enter in the ES, but trade the YM instead - its sister trading instrument.

Do you then base the stop based on the price of the pattern in the ES and just execute it market in the YM when that price is hit in the ES or is your stop level based on the price action for the YM even though your entry signal was in the ES.

Thanks.
 
Status
Not open for further replies.
Back
Top