Bullish White Hammer line but not valid pattern signal. Violates the rule where the LS of the hammer must be > than LS and Body of all 3 candles prior the WRB. NihabaAshi, Would you share the rational behind this rule. What do you see in terms of the demand/supply ? Trying to understand what you see so that i can adapt the rules. thanks
Regarding my rules for inverted hammers - they are mirrors of my rules for hammers. Regarding, the white hammer setup that you liked... I move the stop to breakeven after 6 ticks, so that trade is a loser for me no matter what. And there was no reversal signal either.
Hi simki, More often than not (not every single time) the volume distribution is greater in long lower shadows in comparison to Hammer Lines with shorter lower shadows. Have you notice there's no volume on my charts (I may have posted one by accident). That's to show that volume is not a critical criteria in these sub-groups. I'm also saying that there are other sub-groups with less dependency on comparing the Hammer Line long lower shadow to prior price action because those sub-groups are more dependednt upon volume analysis. Me personally via my trading style...I'm not dependent upon volume. To compensate for such...I need to ensure there's a shift in suppy/demand via measuring the length (depth) of the long lower shadow to the prior price action. With that said...there are numerous types of Bullish White Hammer Patterns... My way isn't the only way and you just need to find one that works well on the Hang Seng Index Futures. Also, via how I trade Bullish White Hammers and my discussion of a particular sub-group along with your chart example... Valid Pattern Signal: No Via how I trade Bullish White Hammers and my discussion of a particular sub-group along with your chart example... Pattern Signal: Yes Entry Signal: No Via how I trade Bullish White Hammers and my discussion of a particular sub-group along with your chart example... Pattern Signal: Yes Entry Signal: Yes Results: Loss Contingency Plan Activated: No Please be aware that I don't believe specific candlestick patterns can be applied to any market as some candlestick traders suggest. one size does not fit all Reason why I only apply Hammer Patterns to specific markets (the charts I'm posting in this thread). It's also a reason why I hope your keeping in-depth info about Hammer Pattern application to the Hang Seng Index Future... Then if you find a particular sub-group of Hammer pattern that performs well in comparison to other sub-groups... Let me know what it is that you found that works and what doesn't work. Hang Seng is just one of those markets I don't trade and am very interested the results of Hammer Pattern application just in case I do decide to trade it. Also, I would need to know what key economic reports in the country for the Hang Seng is well watched... If you know...can you pm me a direct link to the source if any. Greatly appreciated because it will help in seeing the big picture and help with position size managment. NihabaAshi
Hi sunnyskies, Are you satisfied so far with the results of using mirror rules for Hammers and Inverted Hammers ??? I'm curious because you've posted more losing charts of Inverted Hammers in comparison to winning charts of Inverted Hammers. White Hammers are not dependent upon dark WRB's in the prior price action. In contrast, Dark Inverted Hammers are dependent upon white WRB's in the prior price action. Many years ago when I discover that...I stopped using mirror rules. As for you saying the reversal signal was not activated in your most recent chart... http://www.elitetrader.com/vb/attachment.php?s=&postid=842331 It does look like to me it should have via the same type of price action that's in the three charts in this message post: * Dark WRB that forms after the Pattern Signal * Close of Dark WRB within the range of the Hammer Line long lower shadow There's other rules but I'm curious to know your other rules after you said the above about it not being activated. Therefore, can you discuss the reversal signal that was activated in your prior chart ??? http://charts.dacharts.com/2005-08-27/0826-SAR.png Here's a similar price action chart I posted that has a signal to reverse the Long position into a Short position... http://www.elitetrader.com/vb/attachment.php?s=&postid=828434 NihabaAshi
Overall the results of my trading hammers and inverted hammers as inspired by this thread are not inspiring. It's been a breakeven chop. So I guess mirror rules are not so good. On the other hand, I don't know what rulesets are good because I look at winning hammer trades and losing and I can't see some tell tale sign which would distinguish them before the fact. It seems like chaos. Even though I keep charts of every successful and failed hammer and inverted hammer and also put the trades into excel.
as a fun exercise, could you put up some charts of both successfull and failed trades, to see if money management may help?
Hmmm... Try putting aside using mirror rules for awhile. There may be some merits to them in other Hammer sub-groups that's not being discussed in this thread. As for trying to distinguished between repeatable winning Hammer Patterns and repeatable losing Hammer Patterns. I recommend using the same steps (procedure) you did when you discovered your other Hammer pattern that's about 75% reliable. Here's a simple analogy of the above. Let's go back to the position reversal signal... One chart you said the pattern for such occurred and you reversed your losing Long into a profitable Short. However, a recent chart you said there was no position reversal signal. Therefore, only you know the rules that distinguished one price action from another. That process of distinguishing can also be applied to Hammer Patterns. Via the fact you already have a reliable Hammer Pattern and the fact you have the ability to see a repeatable price action (if and when it appears) to tell you its time to reverse a Long position into a Short position... It may only seem like chaos or foreign to you because you have gotten too far away (forgotten) that process of distinguishing one price action from another. Another way to approach this... Take one of my rules (any will do)...apply it to your reliable Hammer Pattern...see if it increases or decreases the reliability of your Hammer Pattern that's 75% reliable on whatever trading instruments your trading. Remember...use Hammer Pattern signals as an entry into what you already know about the market... It is not a suitable methodology to get tunnel vision and ignore everything else going on in the market. NihabaAshi
Spot on that the (aspiring) traders do not take the time: they glance at something and then decide it is not working and that it is all baloney. This was one thing that Woodie was right on: Take one indicator and learn all the ins and outs. I developed one indicator and spend 9 months learning all its nuances. Then I did the same with a second indicator and took another 5 months to learn all its nuances. Cannot automate this, no way to backtest the setup because it depends a lot on "real time" information and multiple timeframes. I am always amused by people who are new to trading and then expect that they can get a system from somewhere and then have the money rolling in. They spend xx years at becoming very good at their previous profession and then when they are laid off, retire then they think they pick this profession up by reading a book or two and joining a chatroom. And we have the youngsters coming in who think the world owes them a living and that the money grows on trees. They get angry when you do not spoon feed them.