Pivot - I understand that your 'version' of candlestick trading is different than mine, I was simply pointing out what I saw. For those reading the thread, they can get a couple different points of view.
Question though - would you have honestly held onto that first hammer through all the 'retracement'? It would take some guts to buy on the hammer with a fairly large stop, watch it retrace past the low of that hammer and then watch it go up.
You are right that a candle by itself is not a valid signal, but in traditional candlestick analysis (what most will be starting with) that 2nd hammer is a beautiful setup.
We should make it clear here that your analysis is based on work by Mark Perry (seen at elitetrader.com) and my analysis is more the 'traditional' candlestick analysis taught by
Steve Nison. This is not to say that one way is better than the other, I just want to make it clear for those reading this thread wondering why we have different views and are looking at the same chart in the 'candlestick' thread. For me, candlesticks are primary and WRB's may be used in conjunction with them.
With that being said, I am new to WRB's and learning more about them daily! Hopefully Mark will post in this forum and head shed some light on them for us!