i wanna share a concept which i have been studying for quite a time now. The concept is the following.
If there is Momentum in the market, which i define as a big bullish or bearish candle below the 4 and 6 emas and those are in trend Setup, i wait for a Hammer in Trend direction and then enter for 2 candles expiry.
Following rules I follow as well:
1) Wick of hammer is not allowed to be bigger than 75 percent of the previous candles size.
2) The Momentum candle must be within reason. It isnt allowed to be extraordinaly large comparing to the last candles.(last 50 candles
3) In a trend Setup i only trade 1 Hammer, Then i wait for the next Setup
4) Hammer has to occur as 2nd or 3rd candle of the Trend
I am using the M5 timeframe but this strategy is, as every good one, usable in every TF
Logic is. Momentum --> Correction in smaller TF --> no new lows/highs established --> still Momentum in the market
I didnt backtest it properly but maybe we could join Forces. If you want to backtest with me contact me on my email: [email protected]