Trading Hammers (revisited)

EURUSD 1 min

 

GBPUSD 15 min

 

Actually this is not failed.

PT1 is taken.

 

Third candle after the hammer was very close to pt1 but couldnt reach to it.

 

Ok here is an obversation that I have just made. 4 over 5 failed failed images there is a dark WRB at candle c2 position. So maybe I am doing something wrong with that one.

 

Ok now time for successes. Again GBPUSD 15 min. A crazy up move.
PT levels that I show are all calculated on shown chart. I havent programmed the upper level chart timeframe calculation `YET`.

 

only PT1 is shown but PT2 and PT3 can also be taken. Pls see the white dots.

 

Here we have the dark WRB again in c2 position but contrary to failed ones this works out nicely.

 

This is the last one.

 

Hi akift,

Thanks for all the charts.

The only one I liked is @ http://www.elitetrader.com/vb/attachment.php?s=&postid=2799876 because it occurred at a key change in supply/demand while the others did not. That key change in supply/demand identification is arguably more important than the hammer pattern itself. Sometimes I refer to this as trade signals at support/resistance zones even though I should refer to it as price areas that represent key changes in supply/demand prior to the appearance of any trade signal.

Anyways, I've mentioned several times in this thread how important it is to only trade hammer pattern signals that occurs at whatever you consider to be a key price level for what ever reason. My personal reasons were briefly (recently) discussed in this thread in a reply to vertigo3 although not in-depth.

Thus, the biggest flaw with codes and the main reason why I stopped using codes around 2000, you just can't code a key change in supply/demand or I wasn't smart enough to do such.

Instead, you got to understand it which implies you're able to do such as it develops and completes in real-time (no hindsight stuff). Next, you just sit back to wait to see if any hammer patterns occurs at/within those key price areas.

Reason why I stated many times in this thread...coding isn't going to teach you how to trade hammer patterns but it is fun (been there and done that) and it can help ensure you're recognizing the pattern signal itself even though it's something you wouldn't trade because it's not occurring at/within a key price area.

Last of all, you have a problem with your code because you missed a rule I stated early in this thread about the close of the white hammer line < or = highest high among the prior two intervals. Simply, you have a few charts that don't qualify via that rule alone.

Mark