James,
STOP TRYING TO SHORT HAMMERS.
Hammers are not reasons to short, at least in the sense you are using them here. That's a topic for discussion WAY down the road.
Your candle trading checklist should be:
1) Identify pattern, if any.
2) Is it bullish or bearish?
3) Bullish =
possible buy; Bearish =
possible short.
4) Run your S/R levels and see if the Risk/Reward works.
Let's start there.
So in this example, we found a hammer = bullish. We cannot short a bullish pattern, that defeats the purpose of using candlestick analysis. There could be more here, but I have to run, so I'll check in later tonight or tomorrow.
Let's just start with identifying whether the candle pattern is BULLISH or BEARISH. And for now, if you say BULLISH you CANNOT short based on that analysis.
OK?
