One follow up to my DIA post b/c it got me thinking... This is the beauty of the forum - I did not play either of those hammers in my personal accounts as I was too wrapped up in to the day-to-day moves on the ES. Now think about this - had I just loaded the boat on the DIA hammer (buying the DIA, options, maybe the YM....) I could have had a stress free trade for DAYS.
Just something to think about.
The candles are very powerful on a daily chart in my opinion. And the reason I say this is that on a daily chart, you just need an EOD software to quickly scan these and then you have all night and the next morning (until 9:30am EST) to plan your trade out. That's pretty powerful stuff if you ask me.
Bottom line is that we are all here to make money. I'm not saying candlestick analysis is perfect, but when you get a hammer like that DIA trade, that can literally make your YEAR if played properly. It's all about risk and how much you are willing to take on a trade like that. In my opinion, trading on a daily chart with that type of a hammer just requires you to pull the trigger and let it rip. I'm of the belief that if you are swing trading (which I don't blame you) and a pristine setup appears, you have to be willing to 'load the boat'. I learned that phrase from another trader that I worked with years ago that would routinely make large 'bets' using the daily charts. He could afford to do this b/c he had plenty of time to do his homework and plenty of time to allocate his accounts and manage the risk. VERY different than day-trading futures.
Some food for thought today class.
