Hi sunnyskies, Got your pm...thanx. Yes...volume is a factor in some patterns I trade but not in the Hammer sub-groups I'm discussing in this thread. However, I do know its a problem for those that use volume as a key component in their trading methodology (stocks, futures et cetera) and then they switch over to Forex that has no volume. How does a volume dependent trader apply his/her trade methodology to Forex Currencies ??? WRB's (wide range bodies) Analysis. WRB's are equal to volume spikes or increasing volume. Thus, whenever you see a WRB...there's usually an increased in volume in comparison to the prior intervals. Knowing such allows visualization of volume in trading instruments that don't have volume. Therefore, if volume was a critical component of somones methodology prior to switching over to Forex... I recommend WRB analysis. However, this is beyond the scope of this Hammer thread and I will not discuss such in this thread. Yet, to learn and/or research what I've said about WRB analysis and Forex Currencies... Side by side...setup a EuroFX EC (it has volume) chart next to Forex EurUsd chart and watch them in realtime along with doing live-recordings for more critical analysis. Without the live-recordings...don't bother researching this because the live-recordings are critical in the learning process of this and it needs to be done on your own because you already have a your own personal interpretation of analyzing volume. EuroFX and Forex EurUsd has almost the same price action. Hindsight charts are ok but may be too difficult for most to develop an understanding of WRB analysis. I will answer your prior questions later. NihabaAshi
NihabaAshi: Is it possible to describe a "hammer" which you would act on ... in twenty words or less? I know! I know! I should read the last jillion posts, but I'm too old fer that ... and I need an example for this. If it ain't worth your bother, that's okay. I'll just start on those jillion posts
I understand the white hammers discussed here can be in the context of 1) trend reversal up 2) trend continuation up. I also understand what trend reversal is. But I do not understand how countertrend trading is different to trend reversal. Does it look different? What makes it different? Are we even discussing countertrend trading with white hammers here? As far as I understand we're only discussing white hammers in context of trend reversal and trend continuation UP. Where does "countertrend" trading come into this?
A bit unclear on the rules described here. Let me summarize to verify my understanding: 1) If one of candles prior to the white hammer is WRB then there's an additional rule: the LS (lowershadow) of hammer should be longer than LSs of 3 candles prior to WRB 2) LS of white hammer should be greater than bodies of 3 prior candles. Correct?
OK. I'm closer to understanding your comments on charts 3 and 4. Maybe almost there. So... The hammer in chart 3 is of a different subgroup. To me it looks like a Bullish White Hammer Pattern in the Trend Continuation context which is a subgroup that you do discuss. How is it not part of this subgroup? And. Let me guess. The reason you would'nt execute on the two hammer signals in chart 4 is because... the next candle never traded below the close of the hammer, not giving you an opportunity for "price improvement". Correct? And my question as to HOW you try to enter at a better price still stands.