Now, here, I will give you an example.
Of trading the hammer, so we have ultimately come here to make trades on the basis of the candlestick
analysis.
So here I'm going to tell you how you can trade a hammer with a ruler.
So, first of all, let me give you an example.
So this is a chart of Nifty when they chart the chart of Nifty.
Can you spot a few hammers here?
You'll see many of them, OK?
And if you just glance through the chart, you will see so many of the families that are getting formed.
Now, the problem with Hammat is that you see many of them and which hammer to trade and which not to
trade.
That is the question.
So as far as this chart is concerned, there are so many hammers that I can tell you.
Here is a hammer, this Energon Hammer.
This is a hammer.
This is you can see such a long tail.
This is the hammer.
And you can see multiple hammers are getting fallen continuously.
One, two, three, four, five hammers are there.
So you can see so many of them.
Of course, there are many of them that you will spot here.
This is, again, the hammer.
But I've taken a few, for your example.
Now you can see one, two, three, four, five, six, nine hammers here.
The question is, are you going to trade each and every hammer?
The answer is no.
You cannot trade each and every hammer because if you treat them, you are bound to lose money in the
long run.
Here, for example, here, when is form market has gendering.
It worked here.
Let's say, for example, this one here market did not go up.
In fact, it was down here also.
Market did not go up.
It went down here.
Market went down.
So there are so many cases where Hammer did not work.
So how to choose a hammer, which will work in most of the cases.
Of course, it is not like that.
That hammer will work in all the cases.
We are trying to increase the probability.
So maybe 70 to 75 percent of the cases, it should work.
So I'm going to tell you a simple filter that you can use while trading the hammer.
So I will firstly give you two basic filters.
Then in coming videos I will give you some more filters to the candlesticks.
So first filter, when you talk about creating Hamade is that you should use that hammer, which is
coming in downtrend is very important.
So this is the first one that you have to ask this question.
Whether this hammer is in downtrend.
If answer is yes, then ask second question.
The second question is identify the next scandal.
As soon as we get hammer, you are not supposed to trade.
You are supposed to wait for the next scandal if next scandal is green.
Then only initiate the trade, so say what is a scandal opens green, then only we have to take this
trade.
So in other words, we don't have to take trade in any hammer that you see on the charts who are going
to see many of them.
And we are not going to trade each and every of those.
So we'll take our example in previous light and we'll see will apply these filters and see how how the
performance improves.
So let's talk about these hammers.
Let's ask a question for each and every hammer.
So here the first question is, is the hammer coming down?
Answer is yes.
Second, see the next scandal?
Is this scandal opening green?
Yes.
If both are, yes, then initiate the trade and you can see that it was a second hammer.
That is this one.
First question, is it coming down?
No, it is not coming in.
Don't don't trend.
That's already happening.
Uptrend has already started.
It is coming in an uptrend.
So we are not going to trade.
So either if one answer is no, then don't trade.
Third one here.
First question, is it coming down?
No, it is not coming down the mountain does happen and the uptrend has started.
We are not going to trade here again.
Ask the question, is it?
No, not at all.
It is an uptrend.
We are not going to trade here.
The question is, is it in downturn?
The US market is and the second is next.
Scandal green.
Yes.
Trade and see it worked.
Say, for example, this kind of question, is it in downtrend?
No, don't read this here.
First question is, is it in downtrend?
Yes, because the market is falling.
Second question, is it a green candle?
So next candle is is it green noon?
So therefore, we are not going to trade this one.
The next one this.
Is it coming in downtrend?
Yes.
Is next candle green.
See, this is the next candle, which is not green open lower than this.
So we are not going to trade and it did not work.
Then this one is this candle coming down there.
You can see four or five red candles here and is next candle green.
Yes.
So you can see we have filtered out these nine hammers and we have come up with this one.
Two and three, and in this case, coincidentally, luckily, all the three worked, isn't it?
But in reality, you will see that seven to eight out of ten will work.
So this is how you have to use the filter in the market while trading the hammer.
I hope you have understood how to apply the filters.
Let's go to the next concept.