Trading Hammers (revisited)

Status
Not open for further replies.
Quote from GoodMood:

Forex - EUR/USD 1h

Dark Inverted Hammer
Continuation Signal

http://www.elitetrader.com/vb/attachment.php?s=&postid=901851

GM
More...

Hi GoodMood,

Nice looking Bearish Dark Inverted Hammer pattern.

Out of curiosity...do you watch EuroFX EC or U.S. Dollar Index while trading Forex EurUsd ???

If not...what do you use to help with your trading of EurUsd ???

Also, I want to post a few comments about that prior chart of yours that's a Bullish White Hammer pattern but not the sub-group I've been discussing.

http://www.elitetrader.com/vb/attachment.php?s=&postid=894977

Here's what I don't like about that particular chart...

The prior three intervals are three consecutive down intervals with lower closes.

In addition, two of them had very long upper shadows (resistance).

Also, two of them had their lows within the range of the White Hammer long lower shadow.

The above implies its a very weak White Hammer pattern sub-group.

Confirmation of that weakness were the following hints:

* White Inverted Hammer Line soon followed the White Hammer Line.

* Body of White Inverted Hammer Line gets engulfed by the body of the dark line you have annotated as Position Reverse.

Therefore, it was a price action that was able to easily shake out any weak longs.

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
 
Quote from jeg:

Hi Mark,

Repeated attempts to post a chart have failed: do you intend to continue this thread?

Regards,

John G
More...

Hi jeg,

Yes, this thread is active but only if someone ask questions or if I see something unusual or different to post about Hammers including chart examples of what I see in comparison to what's already been said so far in this thread.

The activity of this thread is mainly occurring via email and a few pm's I get.

In fact, most of the activity associated with this thread is occurring via emails in which other traders are sending me charts with questions instead of them posting such in this thread.

(I've gotten about +20 emails by ET lurkers that has been a member of EliteTrader.com from a few months to a few years without posting a single post.)

In addition, here are ET chart attachment requirements...

Maximum size: 1048576 bytes
Valid file extensions: gif jpg png doc xls pag txt pdf zip

However, if your chart has not exceeded the size limit and is of one of the proper file extensions allowed by ET and your still unable to post a chart...

Just describe in detail what you saw via the following:

* Name of trading instrument
* Chart Interval
* Pattern Signal
* Entry Time and Price
* EXit Time and Price
* Brief Commentary of the trade or pattern signal

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
 
December 21st Wednesday

CBOT mini-sized Dow - YM

Bullish White Hammer Pattern
Sub-group: reversal signal
Chart Interval: 3min
PT Level Reached: pt3 - pt5 depending upon the chart interval used to manage the trade after entry

Key Economic Reports:

A few culprits in today's early uptrend out of many.

* EIA Petroleum Status Report
* GDP
* Corporate Profits

Knowing the EIA report is being released at 1030am est and knowing that volatility will begin rising sometime between 1030am - 11am est...

It's one of those pattern signals that you try to hang on as long as possible in reaction to the EIA report until you either reach your target, bearish reversal signal tells you to dump it or a trailing stop is hit.

Also via a sister trade...ES Emini could have been traded in reaction to the pattern signal in YM.

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
 

Attachments

December 22nd Thursday

CME EuroFX - EC

Bullish White Hammer Pattern
Sub-group: reversal signal
Chart Interval: 15min
PT Level Reached: pt5

Key Economic Reports:

The 0830am est Jobless Claims and Personal Income and Outlays reports setup the Bullish White Hammer very nicely.

Then the 10am est Leading Indicators report helped take this higher but the 1030am est Natural GAS Status report quickly put an end to the parabolic uptrend.

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=933019</img>
 

Attachments

Having been a lurker for about a week now, going thru the entire thread in detail. Will start posting some charts as soon as I finish. Thank you NA for starting the thread and all those that contributed.
 
Quote from jdollarr:

Having been a lurker for about a week now, going thru the entire thread in detail. Will start posting some charts as soon as I finish. Thank you NA for starting the thread and all those that contributed.
More...

Your welcome and always looking forward to charts being posted in this thread of any type of Hammer pattern you like to trade.

Even better...post the specific criteria (rules) to your Hammer patterns so that it may be truly discussed via its strength and weakness.

I myself want to learn more about White Inverted Hammers because I've found them to be unreliable in the past via how I had traded them and know there must be someone out there with a few trading tips about them.

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
 
Hello from cologne :)

Here is my first posting and my first trade (using candlesticks).

YM
5-min-chart
Bearish dark inverted hammer (I think so?)

Many thanks to NihabaAshi for the most interesting thread here on ET.

And please excuse my bad english. I'm sitting here with my dictionary and "Murphy's grammar in use" trying to remember my english lessons in school twenty years ago :(
 

Attachments

Quote from hopy:

Hello from cologne :)

Here is my first posting and my first trade (using candlesticks).

YM
5-min-chart
Bearish dark inverted hammer (I think so?)

Many thanks to NihabaAshi for the most interesting thread here on ET.

And please excuse my bad english. I'm sitting here with my dictionary and "Murphy's grammar in use" trying to remember my english lessons in school twenty years ago :(
More...

Hi Hopy,

Welcome, english isn't my first language either.

As long as we can read each other messages...its good enough.

I like that YM Bearish Dark Inverted Hammer because its a good example of how the upper shadow of the Dark Inverted Hammer becomes a key candlestick s/r level especially within range of the upper shadows of the prior two candlestick intervals.

However, I would have only gotten about +4 points had I taken that trade in comparison to the profit areas on your chart based on the difference in our trade management.

Yet, I would have gotten a Short re-entry signal on YM 2min chart @ 1554pm est (10831.00) via a candlestick pattern not related to this Hammer thread but related to another thread that revealed the same pattern...

http://www.elitetrader.com/vb/showthread.php?s=&threadid=54525

Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
 
December 21st Wednesday

NYMEX Light Crude Oil - CL

Bullish White Hammer Pattern
Sub-group: reversal signal
Chart Interval: 5min
PT Level Reached: pt4 - pt5 depending upon the chart interval used to manage the trade after pt1

Key Economic Reports:

The main culprit in today's early uptrend out of a few...

* EIA Petroleum Status Report

I've also included a chart of NYMEX emiNY Crude Oil - QM because as mentioned already in this thread...sister trades is suitable via Japanese Candlestick patterns as long as both trading instruments have similar like price action.

Simply, you could have open a Long position in emiNY QM based upon the Bullish White Hammer pattern in Light Crude Oil CL for those that exclusively trades QM.

Therefore, to prevent missing trade signals in QM...you must be monitoring the side by side charts of both QM and CL.

With that said...I've also mentioned in this thread that reversal signals can also behave as a continuation signal.

This is important to know if your a trader that wants to trade with the trend and not be counter-trend trading.

Here's a good example via this trade signal in today's Light Crude Oil price action.

Just increase your chart interval to the 30min or 60min chart interval and you'll see that the Bullish White Hammer pattern on the 5min chart was just a bullish continuation pattern within a higher time frame that's in an uptrend since Dec 21st Wednesday.

Further, knowing the above about the obvious trend would also tell you to increase your chart interval for the profit targets after pt1 has been reached.

Note: Japanese Candlestick patterns are not suitable for counter-trend trading unless your already a very experience and profitable trader via candlestick pattern recognition.

You'll obviously understand the extra risk that's associated with counter-trend trading and will know how to reduce your risk exposure prior to the trade entry.

Mark
(a.k.a. NihabaAshi Japanese Candlestick term
 

Attachments

Status
Not open for further replies.
Back
Top