hello guys i went long here cuz price was in 61.8 level a hammer showed and past resistance became support and i want to know what was my mistake here?
Its not necessarily a mistake but most traders wait for price to confirm a pattern like a hammer - for example, breach of the hammer’s high within the next bar or a few bars, or a close above the hammer’s high within a few bars.
The choice of entering on the signal without confirmation or entering on early confirmation or entering on later confirmation is personal and depends on your risk tolerance. You can either accept a lower win rate with higher profits per winner, or a higher win rate with lower profits per winner.
But most important - where did you put your stop-loss and what % loss did you risk?
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i use 1% risk per trade sl was 6 pips belowe the hammer.
1% risk is good but where do you mean when you say 6 pips below the hammer?
Well, I don’t see anything wrong in the stop level.
The only improvement I would recommend to this approach would be to await confirmation after a hammer etc. pattern before entering. Hammers, shooting stars, pin bars etc. as single-candlestick patterns are not sufficiently reliable to use as an entry signal. Enter on a close above/below the bar’s range: or even wait for breach of the confirmation bar’s range.
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thank you, but if the next candle go up for example 20 pips should i join the trade or not cuz sl needs to be +20 pips?
Yes, you just might need to adjust your TP. Don’t be afraid to reduce your r:r if that’s what the chart says for this trade.
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If you have opened a position only because of those, then you should do the work to strengthen the setup you are using. That is the major problem here.
Also, it is always best to test the things you are using or intend to use. With “hammer” it’s easy. Just go back 2 years and see what happens after a “hammer” appears. And you’ll be amazed how that particular “hammer” from your chart is pointing to a continuation of the down move.
Another point to work on - when you have level, support or resistance, which you think represents a good place to buy or sell you have to be prepared that the market might approach your level in two different ways. It can be fast or slow. Those two approaches require different entry strategies. In your example, it is reaching the level very fast which means that it is better to wait and not enter immediately with a limit order, for example
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Personally, looking at the H4 NZDCAD chart this level does not jump out and scream support to me. I can however see how if you choose to use the FIB tool and see it is the 61.8 you might be tempted to place a trade. I don’t use fib levels though and definitely wouldn’t recommend anyone do so based off of a fib level on anything lower than the daily. (This doesn’t mean it can’t be done, it is just my way of taking what I deem to be only the highest quality trades.)
You could try waiting for confirmation, although I often times prefer to trade a good clear level, based on the daily chart (entry can still be taken on a lower time) and trade it boldly. We used to say that “professional traders are already in profit when the retailers are just getting in.” To trade boldly like that the level has to be placed on the daily or above in my opinion even if you are just scalping for 10 pips. This level would not have qualified for a blind entry like that though in my book so waiting for confirmation probably would have been good.
If the “confirmation” candle runs away you could look to take a 50% retrace entry.
The other possibility, if you have backtested and have a positive expectancy, is that this is simply one of the many losing trades you will have as all strategies have them.
In other words if you have done your back testing don’t over think this loss, just wait for the next quality trade and when it comes along, take it!
Best of luck
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I agree with Tommor that it is not necessarily a mistake.
I’m not a fan of Fibonacci, by the way, I think that the main problem is understanding candlesticks here. It is true that this is a hammer. What does the hammer generally signal? It shows that the price went down during the session, but buyers have been able to push the price right back to open level, so it’s a first sign that buyers are on the market.
If you have a situation like this, you have an uptrend, a small retracement and a hammer, then ok, maybe you can trade the hammer as a strong signal and save on your risk to reward ratio, without waiting for any confirmation.
In the chart you posted, sellers were totally in control of the market. Eleven red candles in a row before the hammer. Some of them, very strong candles. I wouldn’t have traded it even with next candle being green. The hammer doesn’t magically turn a bearish movement into a bullish one. Every case must be analyzed on its own.
Good luck 
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