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YMM1, (3, -1), profitable Strategy, 2.618% profitable


Hi,
Basis YMM1 (June e-mni $5 Dow futures):
Trading from unchanged, 12631, and fading the first move, i.e., -1 of (3, -1):
12631 - the Stretch calculation = 12631 - 27 = 12604 (12601 = low at 21:52PDT).
12631 - 27 = 12604, representing the fade, i.e., -1 of (3, -1)
12604 + 27 + 27 + 27 = 12685 (high = 12692 (12694 = high at 07:01PDT)
This completes the 3 of the (3, -1) formula.

Below you'll find a corrolating 2.618% entry level.

Measuring from the 9 May high, 12677 - 2.618 of the 10 May Stretch = 12677 - 70 = 12607. 12601 = low (21:52PDT)
silverharp, thanks for the response, your explanations (as well as hunter's) are very helpful..i have a couple of quick questions:

- is the dvg you refer to in the chart you posted the higher low in your first indicator when price made a lower low? if so, you look for that type of dvg plus a flattening of the MA?

- what period is your MA and what is the length of your roc/momentum indicator ?

- finally, do you look at a 1 chart or 5min ? i saw some of your posts and they had 5min chart but the one you posted today was a 1min chart, right ?



Originally posted by Silverharp

Ayn, it depends on what divergence you are looking for, in the chart I posted, as the momentum indicators were flat I wanted to see the MA on my chart flatten out, first time round it was still pointing down, with the afternoon high (US) the number was X3 and ROC had a nice divergence with the high, the number on its own might have been enough to close a long however combined with the divergence would generate a sell. Was thinking of taking it but not a huge fan of scalping late in the day. There was the weekly pivot at 12636, it was wiggled on the way up so would have been a target from the high, not to be sneezed at if you got short from say 80. If you wanted to be a bit more conservative you would wait for a retest or a setup like Kools lays out well with a rounded top, didnt happen here though
understood...thanks for the reply hunter

Originally posted by Hunter

Hi Ayn,
Sorry for presuming too much. Tell me if this answers your question.
Ayn, the divergence can be visual (hard to explain) it might be price winding around the MA , moving average flattening, sometimes I put a Fib fan on the chart and will want to see price cross at least one of the fib lines.

I have no magic setting for MA, I picked 89 because its a fib number but I just wanted a slow ma on the chart, the roc is just set to default, it shouldnt matter too much

If its a slow day I tend to look at 1min to see the divergence clues I'm looking for, yesterday 5min would be safer.
ok, got it...everyone has its own way to look at dvg but the way i described it would be how i looked at it from your chart, which seems to have worked in a day like today (dvgs don't mean much in strong trend dats though)

i use 89 as well for the ma, and it seems to attract/reject price pretty nicely most times...

thanks again for all the responses and charts !

just fyi, i will keep using this thread in case i have questions/comments regarding stretch type of trades


Originally posted by Silverharp

Ayn, the divergence can be visual (hard to explain) it might be price winding around the MA , moving average flattening, sometimes I put a Fib fan on the chart and will want to see price cross at least one of the fib lines.

I have no magic setting for MA, I picked 89 because its a fib number but I just wanted a slow ma on the chart, the roc is just set to default, it shouldnt matter too much

If its a slow day I tend to look at 1min to see the divergence clues I'm looking for, yesterday 5min would be safer.
Hi,
Covered YMM1 short, 12658 (I would have sold unchanged, but I was out eating dinner.) at 12640 (20:44PDT). I'm long at 12640 (20:44PDT).
(3, -1) strategy with a close stop. I expect a -1.618% (ultimately -2.618%) decline from unchanged, 12672.
Hi,
Tonight's trade rational... open position down one Stretch calculation, from unchanged and fade that first price move of the A session, 13 May. Today's Stretch calculation is 35.

Covered the PDT YMM1 12640 long at 12666 (22:57PDT). Two trades tonight, +18 points and +26 points, +$220 per contract, and +32% basis $672 intra-day margin for the e-mini $5 Dow. YMM1 is now trading at 12668, and four points from unchanged. Looking further into the (3, -1) formula application, is this fade at (+ / -1.0) from unchanged, counted in the opposite direction from that first reversal price? After .... you decide whether the (3,) of (3,-1) count will start upon the return to unchanged and three more from that price reversal. 13 May A session low, 12637 (20:43PDT). June e-mini $5 Dow futures are trading at 12675, (23:09PDT).
thanks for the updates hunter....what was the rationale for the short at the open ?
Pls try posting before the fact. Past posting winning trades is frowned upon.
"RBURNS 'EM DOWN"... I'm wrongfully accused again, BY YOU. YOU HAVE NO PROBLEM WITH YOUR ETHICS. You accuse before you check the facts.

rburns...You've made a habit of parsing without any critical analysis, without any backend, even without reading the facts, e.g., previous posts and time stamps. You have made a habit of not checking the facts before you discount my posts. For example ... tonight's trade was time stamped at the time of the trade (proven by the time stamp of the post and the time stamp I posted for the 12640.
Check the at the time stamp of the post, the time stamp that I posted and the corrolating price, i.e., today's long YMM1 trade. The trade I posted was in real time. Try reading the time stamp. I did post in real time, lagging just a few minutes. Once again, you wrongfully accuse me without looking at the facts. The long at 12640 posted a time stamp with the post, and the post also has a time stamp.

Ayn... a couple of days ago I saw a pattern that failed unchanged, twice, by the Stretch. I planned to fade the first price move lower, i.e, by the Stretch and therefore decided to initiate the short, 12658 (rburns again posted with time stamps check the post) and reverse at the Stretch. Subsequently the rally off the low was equal to approximately the previous day's 2.618% of the Stretch.
cant post chart now,12580 is the next number , otherwise it looks like bottomoming on the Dow, but no divergence that I can see on DX
was hoping the es would go to its 1.618 at the open which would have likely pushed ym to its 2.618 stretch...that would have been the ideal scenario for me to get long...