Hammer Model [#]

Hammer Model [#] - HTF Candle Entry Model

Overview
The Hammer Model is a sophisticated technical indicator that identifies high-probability reversal setups based on Higher Timeframe (HTF) candlestick wick rejection patterns. Unlike traditional hammer pattern indicators that simply flag candle formations, this system provides a complete trading framework with precise entry zones, stop loss placement, and multiple take profit targets calculated using statistical projections.

What Makes This Different

• Proprietary Signal Filtering: This indicator uses a proprietary algorithm that analyzes multiple market structure conditions to filter out low-quality hammer patterns. Only the highest-probability setups are displayed, significantly reducing false signals compared to standard pattern recognition tools.
  
• Dynamic Quadrant Mapping: Rather than basic support/resistance levels, the system divides each qualified hammer candle into three distinct zones (Upper Wick, Body, and Lower Wick), with precise .25, .5, and .75 subdivision levels for granular entry and exit planning.
  
• Multi-Standard Deviation Projections: The indicator automatically calculates TP1 and TP2 targets based on the wick's range, along with optional 1-4 standard deviation extension levels for position scaling and profit maximization.
  

How It Works
Signal Generation @ Candle Close/New Candle Open
The indicator monitors your chart for HTF candles that meet specific criteria:

Bullish Hammer: Lower wick must be significantly larger than the body
Bearish Hammer: Upper wick must be significantly larger than the body
When both wicks qualify, the indicator selects the larger wick as the primary signal, depending on conditions set.

Visual Components

Bullish Setups:

• SL: Stop loss level (below lower wick)
  
• ENTRY: Entry zone (candle body range)
  
• .25/.5/.25: Wick quadrant levels for scaling entries
  
• TP1/TP2: First and second take profit targets
  
• 1-4STDV: Advanced/Long Range Targets
  

Bearish Setups:

• SL: Stop loss level (above upper wick)
  
• ENTRY: Entry zone (candle body range)
  
• .25/.5/.25: Wick quadrant levels for scaling entries
  
• TP1/TP2: First and second take profit targets
  
• 1-4STDV: Advanced/Long Range Targets
  

HTF Candle Overlay (Optional):

• Displays the actual HTF candle that generated the signal
  
• Shows Open, High, Low, and Close lines for context
  

Trading the Signals

For Bullish Hammers (Long):

• Entry is @ HTF Candle Close / New HTF Candle Open (or wait for a .25-.5 wick retrace)
  
• Place stop loss at or 1 tick below the SL level (lower wick low)
  
• Target TP1 (1x wick range above) and TP2 (2x wick range above) and STDV
  
• Use .25/.5/.25 levels to scale into positions or manage partial exits
  

For Bearish Hammers (Short):

• Entry is @ HTF Candle Close / New HTF Candle Open (or wait for a .25-.5 wick retrace)
  
• Place stop loss at or above the SL level (upper wick high)
  
• Target TP1 (1x wick range below) and TP2 (2x wick range below) and STDV
  
• Use .25/.5/.25 levels to scale into positions or manage partial exits
  

Key Settings
Hammer Model Conditions

• Bullish/Bearish: Toggle which direction setups to display
  
• 1-2STDV / 3-4STDV: Show extended projection levels
  
• HTF Liquidity Sweep: Filter for setups that swept previous HTF highs/lows (proprietary)
  
• Wick Size: Require larger wick-to-body ratio (1.75x vs 1x)
  
• Time Filters: Isolate setups during specific trading sessions (NY AM/PM, Asia, London)
  
• Hourly Filters: Target setups that form during specific hour segments (useful for lower timeframes)
  

Display Options

• Show Recent Hammer Models: Limit how many setups display on chart (default: 4)
  
• Unlimited: Show all historical setups
  
• Candle Quadrants: Toggle .25, .5, .25 subdivision lines
  
• HTF Candle Overlay: Display the actual HTF candle that generated the signal
  

Timeframes

• 1min chart → 15min HTF (scalping)
  
• 5min chart → 1H HTF (day trading)
  
• 15min chart → 4H HTF (swing trading)
  
• 1H chart → Daily HTF (position trading)
  

The indicator automatically selects appropriate HTF pairs

Why Closed Source
This indicator is closed source to protect proprietary filtering algorithms that determine which hammer patterns qualify as valid signals. These filters analyze specific market structure conditions, liquidity dynamics, and statistical thresholds that have been developed through extensive backtesting, data logging over 1 years time, and represent the core intellectual property of this system. The filtering methodology is what separates this from basic pattern recognition tools and delivers higher-probability setups. To learn how to learn more about this system see Author Notes.


Best Practices

• Confluence: Use this indicator alongside trend analysis, key support/resistance levels, or volume profiles
  
• Risk Management: The SL levels provide clear invalidation points - always honor them
  
• Scaling: Use the quadrant levels (.25/.5/.25) to scale into positions rather than entering full size at once
  
• Session Filters: Enable time filters to focus on setups during high-liquidity sessions
  
• Backtesting: Review historical signals on your preferred instruments to understand typical behavior and win rates
  

Notes

• The indicator displays a table in the top-right showing the current chart timeframe and HTF being analyzed
  
• Only charts with sufficient historical data will display all past signals
  
• The "Unlimited" option may cause performance issues on very low timeframes with extensive history
  

Disclaimer: This indicator is a tool for technical analysis and risk management education and does not guarantee profitable trades. Always practice proper risk management and position sizing. Past performance does not indicate future results