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# Verifying Hunters method

Starting this journal to properly understand Hunter's method and also run the method through the paces. Will start from Sun (5/14)

YMM1 settled at 12556
Stretch: 37
1.612 of 37=59.64; say 60
12556-60=12496
or
12556+60=12616
whichever occurs first.
S/L @20 points after trade trigerred
Take profit at 3x37
12496+111=12607
or
12616-111=12505
Hi Hunter,

It is difficult to be objective about where to buy or sell if i allow different entry points other than 1.618 stretch extention. i just dont have the experience. therefore, for present, buy/sell will be at 1.618 with s/l @20 points when trade is trigerred. this method may actually make fewer trades with better results when subjective trade is not taken.
for today no trade in es yet. waiting for drop to 1318 for a buy.

Originally posted by Hunter

Hi insyte,
Will you allow a few ticks to compensate if the high or low entry level was within a few ticks of entry or exit?

Based on the guidelines you set forth to "Verify Hunters Method," i.e., fade + / - 1.618% of the Stretch with a trade target projection equal to three Stretch calculations, there was no error of slippage based on your rules. Today's projected 1.618% of the Stretch missed the short entry by six ticks (at the high print, 12562), but would have easily satisfied the projected "three Stretch calculations below."

Was short YMM1 at 12492, stopped at 12508. Sold short, again, (12555) 13 points below 1.618% of the Stretch (12509 + 59 = 12568). The high print at 12562, is eight points below the (Stretch + 1.618% of the Stretch calculation). Covered the 12555 short at 12494, +61 pts less the 16 points from the first trade = +45 points @ \$5 per tick = +\$225 per contract.
Hi insyte,
Most studies allow for a + / - % margin of error . Considering that 1.618% of the Stretch calculation projected six ticks above the high ... and the previous day projected and reversed within seven points of the low and three ticks below the high, this is indicative that these guidelines are projected and followed not only. By you, but by many other traders. Given the very close ( yesterday's nearly exact match of the 1.618% of the Stretch fade, should a + / - one to three percent margin of error be provided within parameters? Personally ... I would prefer a +/- one to three margin of error based on the average daily volume for the previuos month. This would serve to include successful trading days like today, which as you know... starting and maintaining a successful track record is significantly enhanced if day 2 (and the early test dates) and the early test dates are satisfy the test model. This request is for a few points and you can take it out of my allowance. After all... it is fading a counter trend price move that IS UNDER THE INFLUENCE OF A FRACTAL BREAK DOWN O/N THE. DAILY YMM1 CHART AND A. Minor Trend Reversal Indicator that has been confirmed. This is day two of the test, which makes the characteristic reliability of the method a 100% (from day two which a tradeable probability) or a 50% probabilty of success, which of course you could stop the test of the VERIFYING HUNTERS METHOD at day two because it will not produce (at least not very likely) tradeable probabilities. So the question remains... allow several points for slippage (reduce the stop from projected + / - 1.618% fade) and take the test parameters stop loss from the point of entry,... or why continue because the probability of making up the viability on a day-to-day basis will not make it a viable strategy. NOTE TODAY WOULD HAVE SATISFIED THE "VERIFYING HUNTERS METHOD" if allowed the six extra points.
if the method was followed as laid out in the first post on this thread for YM today, the trade would have again been unsuccessful,
with a sell coming at 13569 with a 20 points stop. the high got up to 12607 so trade would have been a loss. need to refine the method to see if a 40 point s/l would work better for future trades.it in this trade the s/l was 40 points then the trade would have been successful with a profit of 111 points.
Hi insyte,
Maybe I misunderstood the "Verifying Hunters Method" test parameters. If a trade entry fails that day, are your test parameters defining the tradeable probabilities of whether or not these tests will perform every day? If yes today's entry that missed by six points would produce less than tradeable probabilities and continued analysis of the method is not neccessary. If the test guidelines are based onwhether the number of days with successful entries produced successfully, or produced a loss, withrespect for the days that satisfied the entry / stop loss or exit parameters, and not include those days that did not hit the paramets to enter into a trade... obviously the later is probably the case; but I had to. Ask. Hey can I have a'muligan' once each month? I want to make today that 'muligan.'
hi Hunter...just a trade a day..if the trade triggers..only trying to get a hang of the system without getting confused with the verbage.
Hi insyte,
Ok, speak slowly, thanks. One trade per day, that can be stopped out, or satisfy the fade +/- 1.618% of the Stretch fade. Each day reflects on the track record only for those days that initiated a trade within the Verifying Hunters Method guidelines, and not on all possible trading days.

Thanks again. I'm looking forward to your success.
So I'm just testing this right now ...the Hunter Method.....and I'm having a real fun time.....trading semi-manually that is, but my challenge is to make it more autonomous.......I'm not there yet.....but maybe soon.

Some observations.....
-The base stretch number looks to be a valid entry point for a trade.
-The Stretch number and derivatives thereof can be auto-reversal points....Where a long turns to a short and negating the profit target.
-There is a cycle or sequence happening here, but its not necessarily chronological.

This happened on NQ and ES today(from yesterday)

On NQ the trade points were
Long from Base stretch
Short from 1.618 Level
Long from Short Base Stretch Target (it inverted here!)
Close above long at Base Short Stretch (2341)

I left the NQ long on.....I'm gonna sell at 2345.5 which is the close + stretch........That seems to be happening to.

Same thing happened with ES......1321, 1332, 1316 then End of Day.
30+ points on ES.....

You can see it .....if you lay-out a worksheet and the numbers with a matrix.
Set-up 5/17-18

YMM1 settled at 12437
Stretch: 40
1.612 of 37=65
or
sell @ 12437+65=12502
whichever occurs first.
S/L @49 points after trade trigerred
Take profit at 3x40=120
@12992
or
@12382
Check your numbers.....I have 435 on the close.....but I'm off sometimes.....

Also be aware:
YM reversed at that 4.236 level today almost precisely....sometimes hitting extreme markers can reverse the ST trend.
At that same level YM caught support on the Daily 50EMA.....bullish.
YM daily RSI is low. Not Super low but low.
And the volume on DIA, the DOW ETF was 25million....3 times normal.
HBBJ
Thanks for sharing your ideas, posts and tomorrows strategy.

Insyte, Why did you change the stop loss for the "Verify Hunter's Method," on day one from 20 to 49 on day two?

A twenty point stop loss risks 14% basis \$672 intra-day margin for the June e-mini \$5 Dow futures (YMM1). The 17 May 2011 trade plan exit projected a 111 point profit, ... making the reward : risk ratio approximately 5.5 : 1.

A 49 point point stop loss is not only 2.5 greater risk, i.e., risks \$245, a 36% intra-day YMM1 margin, but reduces the possible reward : risk ratio to 3 : 1.

Grednfer, The exchange, www.cmegroup.com is the reliable quote provider. The exchange posted the settlement, 12437. The symmetry of the universe is extraordinary. The inverse entropy theory provides reason to believe that lower tradeable probabilities (not out-perform the market) will occur using 'black box' / auto-reversal entry points. The 1.618% of the Stretch calculation, while it may provide lower risk than the Stretch calculation with respect to the fade can not replace investor psychology. (Trading from unchanged, today's low reversal point supports your hypothesis. Example: The human mind can determine if a consolidation pattern will resume with a breakout, or if those breakouts are false breakouts from within that consolidation that is approximately the Stretch or 1.618% of the Stretch. One description of these false breakouts, which are admittedly derogatory and unsympathetically cruel, is 'an S&P minute.' Greed, fear and avarice drive the temporary consensus of value, which is always wrong, price.

Have you implemented the counter trend formula? The more proficient traders who take action on this (3, -1) strategy, and its counter part, the more likely the efficacy of the formula will wane.
Thanks for posting your shared mutual interests. Last night I faded the first move by the Stretch calculation, risked eight YMZ1 (December \$5 Dow futures), and opened a trailing stop, which was filled. The trailing stop performed with the offset. The (3) of (3, -1) didn't complete the price action projection. Knowing whether to fade the Stretch or 1.618% of the Stretch calculation is determined by the trader's perspective, not a cookie cutter price following mechanism. It's more useful as a price level assessment tool that can be used to identify whether an entry / exit is wise.

Here's my post elsewhere:
YMZ1 (December \$5 Dow futures): Trading the (3, -1) formula from unchanged, ... fading the first move at the Stretch (46 pts) calculation (because every attempt above 12000 has failed recently), i.e., 12007 + 46 = 12053 (high = 12060, so far, risking \$40 at one tick above the high). This represents the faded entry, i.e., (-1) of (3, -1). 12053 - 46 - 46 - 46 = 11915.

Insyte: I didn't post through the Summer, but am interested in your back testing of the (3, -1) formula. A physicist published the formula about ten years ago. The markets are mecurial and I don't expect a consistent long term tool. But, I have noticed that it works well when professional traders are gaming the system.... like when 'they' are waiting for global uncertainty to stabilize, or not.

The (3,-1) intra-day trading technique, like anything else, is not perfect. A few months ago you could sell the equity indicies when Europe's markets opened and buy back that short when those markets in Europe closed. Just an example of how nothing lasts, however, this price action pattern does tend to repeat on and off through each year. Earlier this year, for several weeks, sideways price action was rotating around 1.618% and 2.618% of the Stretch, but within the typical price action that tends to print directly or inversely around 4.25% of the Stretch.

Yorkmax: I started intra-day trading equity index futures in 1984 and have seen many different technical analysis tools perform well at times, but not at other times. (Ken Shaleen sells a Technical Analysis Characteristic Reliability Index, which I can summarize. Equity index futures are one of the worst markets when technical analysis is applied to, and tends to produce less than tradeable probabilities (+72%). You can't buy the strategy, but you can learn when, and how to use it. Sometimes the (3, -1) formula initiates an opportunity with mid-session support / resistance.

Special note: The Delta Society has published a tool, The Delta Phenomenon, which allows for a new beginning, i.e., instead of 1-10, as they count, it prints, 1, 1A, 2-10. They've (reportedly, and I have their book,) 200+ years of data to back up their "formula," or "theory," or "recipe," or whatever you want to call it. For the purposes of bright, brief and gone, look on a daily 45 Dow futures chart and pick a low, counting four days. The equity index futures are notoriously late by a day or two, but on the first late day, the odds of a reversal increase to 70%, and on the second late day the odds of a reversal increase to +80%.

My point, I've been recognizing that alternate ... 1, 1A, ... (3, -1) price projection.

I am looking forward to your shared mutual interests.