Great points.As a developing trader I've made the mistake a number of times by taking the trade in a vacuum and not considering the other indicators you mention.Part of it comes from being overly aggressive.I'm realizing the more indicators that are lined up the higher the probability.That is when candlesticks are most useful.
There lays the conflict. The "Trading Hammers (revisited)" shows how to trade hammer patterns without indicators and volume. In addition, there's no discussion about failed hammers as continuation price action in that thread. Instead, the discussion is about hammers that appear as trend reversal signals and another discussion as trend continuation signals in pullbacks or minor retracments (higher lows). It's also a thread to show that hammers can profitably be traded without indicators and without volume analysis. Simply, if you're into indicators or volume...there's other threads about such but not as in-depth as trading Japanese Candlesticks without indicators. Therefore, if you need indicators...use them. If not, the "Trading Hammers (revisited) thread is for you or others interested in one type of price action only trading. However, I may include a discussion within the thread about what type of hammer patterns should be faded in reference to your failed hammer statement. Mark
I think candlesticks are useful for analyzing day-to-day (or week-to-week) price action. In effect, they show the judgement of traders on how the session (or week) should wrap up, and what they are comfortable leaving with for the day, and sleeping with overnight. I find them useless for intraday trading. (I use OHLC. I want to know readily the full range of price.) If you think about it, just a few seconds time can change the pattern (and drive you batty trying to make sense of it). Nonetheless, if you wish an alternative to Nison's books, I suggest Greg Morris: Candlestick Charting Explained. Also check StockCharts for a quick intro: http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:introduction_to_cand