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Definition of 'Pitbull'

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Take the opening price (1424 even in the above chart) and add and subtract the following numbers:
2.5 (1421.50/1426.50)
4.0 (1420.00/1428.00)
5.5 (1418.50/1429.50)
8.0 (1416.00/1432.00)
Set these as turning point lines on your chart as above.

(The strategy capitalizes on the floors ability to push the market in one direction to sucker in the public only to have it snap back towards the opening range. It works best when the market is pushed to an extreme of either an overnight high or low or the previous days high or low as confluence numbers). This is comparable to "open-test-reject" in Market Profile parlance.

This sets up the WINDOW of trade entry points. The example chart above is from Friday January 5, 2007.

The Rules
  • If the market opens and drops down to the minus 2.5 number and then rallies to the open you buy.
  • If the market opens and drops down to the minus 4 you then buy at the minus 2.5 on the way back up.
  • If the market drops down to the minus 5.5 you buy the minus 4 number.
  • If the market drops to the minus 8 you buy the minus 5.5.
This is reversed for the upside when the market rallies off the open.

Anything beyond a plus or minus 8 means that the market is too risky too initiate from down or up from the opening so avoid trading. The further out into the WINDOW you went then the riskier it becomes so buying a minus 2.5 after a hit on minus 4 is a safer trade then buying a minus 4 number after a minus 5.5.

The target is always 1.5 off the window number and not the fill price.

You stop trading if the markets drop 2.5 points below the opening and then trade 2.5 above the opening. This is called a COMPLETED WINDOW RUN and the floor is done doing it's business. At this point you are finished also. Just one or two good trades a day.

The information in this trading strategy definition comes from BruceM and was started in the topic Pitbull Three Strategy.

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