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YMM1, (3, -1), profitable strategy, Stretch


Hi,
These past several months I've been posting this intra-day e-mini $5 Dow futures trading strategy in the Traders Lounge; and thought I would post the same in this room, for the purpose of identifying students of the markets who are interested to intra-day trade e-mini $5 Dow futures (YMM1).

Hi,
Trading from the 28 April settlement, 12708, and applying the (3, -1) formula to the Stretch calculation, and the Fibonacci of the Stretch calculations, the following price measurements printed before the end of the B trading session, this Friday afternoon:

28 April settlement = 12708
Stretch = 27
1.618% of the Stretch = 43
2.618% of the Stretch = 70
4.25% of the Stretch = 114 (108 = 29 April high - low = 12796-12688)
Pivot point = 12680 (never printed)
29 April high = 12796
29 April low = 12688
29 April settlment = 12794 + 86

12720- 27= 12700 (fading first intra-day counter trend = -1 of (3, -1)
12708 + 27 + 27 + 27 =12789 completing the trending move 3 of (3, -1)

12720 tested previous day's high (that's with the trend, up).
12720- 27 = 12693 =[12720 - Stretch calculation = 12693] (low=12688).

June e-mini $5 Dow rallied from the low, 12688 to unchanged, 12708, and rallied an additional three Stretch calculations, completing the 3 of (3, -1) formula basis trading the Stretch calculation from unchanged.


12708 opened and tested the 28 April high, 12724 (12:45PDT, which high failed in the last half hour (call it profit taking or ... evening up of positions going into the close.... whatever you want to call it, 12724 reversal trend from the high lower to the settlement, 12708). The 29 April A session soon lifted from 12708 to 12720, testing the previous day's high, 12724, failing 12720, decline to 12688 (28 April low = 12688). (12720 - 27 = 12693) From the low, 12688, prices rallied into the close, 12794 (12796 = high 29 April).
Thanks Hunter, loads of questions but just one for now. I had left the orginal stretch projections (1.61 & 2.61)off the settlement number on my chart for the day (in red and blue). Do you do the same? or do you tend to focus on calcs off the most recent high low or intraday high low.

Cheers
my attempt for today, a buy setup in the making if we can get lower?



Click image for original size
stretch8
Im on a different computer so cant check the chart I posted. May have made a mistake with the 261 of stretch

12778 is the last high

1.61 12735 (-43)
2.61 12708 (-70)

I didnt like the last low as it was between the numbers, the 12798 lines up nicely with the Fib extension
12708 not 12798
testing that 12730 again
I wish I was short but didnt get pulled into a bad trade ;-)
using the settlement number 12749 - (27x4.25) = 12634 which 1 point away from the low. At the same time trying not to find numbers everywhere. we will see
took the long. 786 of intra day is the settlement from y/day and just above 261 fib projection. Not a hero, stop just below low.
The lod was 3 X stretch X 1.61 from settlement (to 3 points), I only noticed afterwards as I didnt have the numbers to hand. I got two good bites out of the rebound based on other entries, so 2 profitable days so far and no big losses. I'm going to set a file up for the S&P and see how that works, reason being one or other index might setup a lower high for instance, it happened y/day where the Dow made a new high but the S&P made a lower high , by comparing both indexes might give more confidence that a target is good.

One tip if anyone is trying to follow this, set up a couple of Fibs on your chart and leave them there, the first can be the stretch 0-100 and second will be stretch 1.61 0-100 , you can set up the ratios, 161 261 300 and 425 and the minus the same ratios. Each day move the 0% to the new settlement number and update the for new stretch (100%)if necessary. It should save time, although I think its worth putting a spreadsheet together to calc the stretch and the ratios in a way that suits you.

Its an interesting approach and look forward to integrating the stretch into my trading. using the Fib ratios to help confirm exits is useful and some form of traditional divergence tool will help to avoid jumping at the first number for an entry.
went short 2 hrs ago at the 1.61 of stretch from settlement. hopefully this will be the first fade day for me ;-)
Hunter you put your method out there for people to review. Whats with this browbeating?