As a swing trader it is important to understand that strength often begets more strength. This is the central principle of the hammer setup. We look for strength at the end that reverses what looked to be a down move earlier in the day.
$SPY is a good example of this setup. Trade Report members were alerted to this setup as I made the trade before the market close. Like clockwork the market gapped up today and the position was sold for a quick profit.
It is tough for some to enter a position when a significant move has already been made. However, this is a high probability setup and one must forget about what has already happened and look to the high probability of what will happen.
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