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YMH2, (3, -1) formula, 3x Stretch profit, 7 Feb 2012


Hi,
7 February:
Basis intra-day trading the March $5 Dow (YMH2) futures with the (3, -1) formula and, fading the first counter trend move that was below the previous settlement, 12776,... 12776 less the Stretch =
12776 - 38 = 12738 (12729 = LOW)
12729 + 38 + 38 + 38 = 12843 (12851 = high) .... $ :-)

Fading exactly at the previous settlement less the Stretch, i.e., 12776 - 38 = 12738, i.e., net long,.... 12738 + 38 + 38 + 38 = 12852 (12851 = high).
Once again, the (3, -1) formula projected and achieved an intra-day price objective.
Namaste
Hunter, like many others here, I too have been trying to decipher your (3, -1) formula trades...interesting, but one question...

How do you make a decision to fade a 1.000*stretch here on Feb 7th, whereas you chose to fade at 1.618*stretch in another link that you posted for Feb 6th trade (http://www.mypivots.com/board/topic/7249/-1/ymh2-3-1-formula-fade-1-618-stretch-6-feb-2012)?

Thanks in advance.
Thanks stocksster,
The bright, brief and gone answer is candlestick analysis of the daily March $5 Dow (YMH2) futures chart with a watchful eye to the highs previous to the breakout. Though this answer will not be the same answer everytime, because each trade is different, I'll try and make this as painless as possible. Reach down with both hands.... sorry wrong answer.

Measure the consolidation highs, and average these, respectively, 23, 25, 27 of January, 1 and 2 of February, .... 12709, 12725, 12720, 12735, 12701 .... average 12718. 26 January printed a 12786 high.
1 February hourly bars printed highs at 12735, 12731, 12731, 12733, and 12731 (average = )which correlates to the 6 February fade at 1.618% Stretch for the 7 February fade at unchanged less the Stretch calculation.
3 February printed a breakout high at 12833, with a close at 12797. Prices hadn't pullback to test the 12718 - 12735 which was resistance before the breakout 3 February.
6 February: unchanged less 1.618% of the Stretch = 12793 - 63 = 12730. (12722 = low)

I think this answers your question, but if I left one thing out, it is because you already know what happens after resistance is breached, .... snapback reaction testing the former resistance which becomes the first line of support. That support correlated to the above and a couple of fades 6 and 7 February.
Namaste