Hello Niha, thank you for your comments. I saw the dark WRB two bars before the white Hammer appeared but I didn't spend much attention to it - one of my typical mistakes (only staring at the white hammer) I didn't reverse my position because of the dark candle two bars before the dark WRB (my exit). I was too anxious and didn't reverse it. Mistake number two and the last mistake in trading today Bye Hopy
Here's another chart of a failed Bullish White Hammer pattern that had its plan B (contingency pattern) activated. Simply, reverse the Long position into a Short position if/when the contingency pattern appears. CME EuroFX - EC Also, when you look at the chart...scroll all the way to the left to the time 1:40pm. You'll see a White Hammer Line (not a valid pattern) with a long lower shadow. The range of that long lower shadow is a key candlestick s/r zone. Simply, that's a good place to dump any remainders of the Short position as a pt3 profit target. Mark (a.k.a. NihabaAshi) Japanese Candlestick term <img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=948268</img>
on 09-10-05 12:20 PM NA wrote: ------------------------------------------------- I've attached a 60min chart of the CBOT 10 Year Treasury Note - ZN On that chart are Bullish White Hammer Patterns that would show up on most traders radar screen. However, via what sunnyskies has summarized about my rules of a valid Bullish White Hammer Pattern... http://www.elitetrader.com/vb/showt...5&pagenumber=42 (Note: There are a few more rules that's being intentionally saved for later discussions. However, what's posted so far should give you a good peek sort'uv speak.) Which of those White Hammers would I have traded and which ones would you have traded ??? I'll give you some hints about which ones I would have shown up on my radar screen: * Based upon my trade methodology of Bullish White Hammer Patterns... Only two of those seven Bullish White Hammer Pattern (WH) would have shown up on my radar screen. The five particular sub-groups that I would have ignored are not very reliable. * My edge in trading this particular hammer sub-group would have reached a WRB pt2 profit level (read thread to know what my definition is of a WRB Profit Target). Good luck with the quiz and I look forward to your reply. NihabaAshi -------------------------------------------- WH1 and WH5 would have been the ones qualifying for Bullish White Hammer Patterns focused on this thread. PT1 and PT2 are shown on the attached chart.
NA, It finally dawned on me the reasons why you pay attention to these econo reports. You are looking for a catalyst that "might" produce meanful price action, such as WRBs. Never mind predicting what the news is going to do, thats not important. The important thing is these reports are usually catalysts that produces WRBs, and once the WRB actions are seen, observe for emerging hammer patterns on the target underlying as well as related sister instruments for hammer patterns.
ER2 Continuation Bearish DHL 18:18 Sell 708.70(3) 18:24 Buy 709.50(3) reverse 18:24 Buy 709.60(3) Sell 710.40(1) Sell 710.60(1) Sell 709.80(1)
ES Bearish DIH (This pattern wasn't very clear. But the day was boring and there was only a little risk. In hindsight it was pure luck) 19:45 Sell 1296.75(3) Buy 1296.00(1) Buy 1292.75(1) 20:41 Buy 1292.75(1)
Hi Hopy, I just noticed something odd about your chart... The time set of intervals are set differently than the CME time set for EuroFX EC. That produces different candlestick patterns. It looks like your data provider has changed to interval so that the 1/2 hour is an even number whereas in reality the EuroFX is 0829am, 0859am, 0929am, 0959am, 1029am and so on. If your getting 0900am, 0930am, 1000am, 1030am then its not the correct interval setting for EuroFX EC. Thus, producing different candlestick patterns on the 3min chart. Some data providers do that so that all their data has the exact same interval time set. They usually do this by changing the Opening time of the instrument after its normal maintenance time. Another trading instrument I see this done in error is CBOT trading instruments like mini-sized Dow YM and the Treasury Futures. Most institutions, professional firms and all the higher end data vendors are using 0829am, 0859am, 0929am, 0959am, 1029am and so on. Simply, when trading via candlestick patterns...try to use a data vendor that doesn't alter the start times nor interval time sets. However, is you prefer that data vendor than your going to need to understand the price action prior to the candlestick pattern. With all that is said...lets take a closer look at the price action prior to your Dark Inverted Hammer. First of all, its easy to get the Bearish Dark Shooting Star and the Bearish Dark Inverted Hammer reversal patterns confused. The Dark Shooting Star has a lower reliability than the Dark Inverted Hammer because there are often rising white lines between the White WRB and the Dark Shooting Star. Simply, when we see those white lines its a good indication that buyers are brave and willing to push this higher especially when those white lines have long lower shadows. However, with the Bearish Dark Inverted Hammer reversal pattern we don't want to see that if there are no dark lines between the White WRB and the Dark Inverted Hammer... The high of the Dark Inverted Hammer cannot be higher than the highs of any White Lines between the White WRB and the Dark Inverted Hammer to prevent from behaving like a Dark Shooting Star (low reliable pattern). Therefore, I'll reveal a rule that differentiates the two: * If there are no dark lines among the intervals between the White WRB and the Dark Inverted Hammer... High of Dark Inverted Hammer must be < or = to the Highs of all the white candlestick lines between the White WRB and the Dark Inverted Hammer. ------------------- I'll also re-mention a prior rule discussed in this thread about the dark lines because its a key part of this message post. * If there are dark lines among the intervals between the White WRB and the Dark Inverted Hammer... Close of Dark Inverted Hammer must be < Close of the most recent dark line to the Dark Inverted Hammer. -------------------- The price action above ensures that the demand is either declining or exhausted (lost its upside momentum). It also ensures that the Dark Inverted Hammer has closed below any candlestick s/r levels that may be present among those intervals between the White WRB and the Dark Inverted Hammer line. This puts the odds in our favor when trading Bearish Dark Inverted Hammers in comparison to Bearish Dark Shooting Stars. Once again, be careful about those white lines with long lower shadows (buyers showing up) when there are no dark lines between the White WRB and Dark Inverted Hammer. Last of all, I've attached a chart of a Bullish White Hammer continuation pattern on EuroFX EC 3min chart and you will be able to see the interval time set difference in our charts that didn't produce a pattern signal for you and that didn't produce the Dark Inverted Hammer for me as it did on your chart. Bullish White Hammers can be either a reversal or continuation pattern signals In this particular chart the profit target 1 (pt1) occurred via the 3min pattern signal chart and pt2, pt3 via the 5min chart interval. Thus, continuation pattern signals is a good time to increase the chart interval for pt2 and higher due to its trading with whatever trend you've identified and you want to exploit that trend as much as possible. Mark (a.k.a. NihabaAshi) Japanese Candlestick term
A correction is due for the below Dark Inverted Hammer pattern. I said the following... * If there are no dark lines among the intervals between the White WRB and the Dark Inverted Hammer... High of Dark Inverted Hammer must be < or = to the Highs of all the white candlestick lines between the White WRB and the Dark Inverted Hammer. -------------------- That's incorrect and it should have said the following and the correct statement is underlined... * If there are no dark lines among the intervals between the White WRB and the Dark Inverted Hammer... High of Dark Inverted Hammer must be < or = to the Highest High among the white lines between the White WRB and the Dark Inverted Hammer. -------------------- Mark (a.k.a. NihabaAshi) Japanese Candlestick term
Mark, So you have found in your trading that you enter a position on the 3 minute chart, first exit is on the 3 min chart and the other exit points are based on the 5 minute chart? If so, I'm curious to know why that is. Thanks! Chris