Jack Hershey Method: Beginner Rockets

[Chicken Little]

Quote from oddiduro:

This looks like automation.

Make sure that you have code that will not take the trade if volume does not confirm the breakout. Volume should exceed DU, and price should maintain it's strengh through the next bar. If price goes against you immediately, you could get hurt badly on a spike if you are not there to oversee the trade.

On three of you short trades you could have gotten out earlier than you did if you were doing it by hand.

There is monitoring that needs to be done, this is not a "set it and forget it" system.

Best Regards
Oddi

I am trying to compare automated with manual. If the automated
is not correct, the comparison would be invalid. The set of rules incorporated into the model are as follows:

Decisions are made at bar ends to be executed immediately on the open of the next bar. For sell triggers such as generated today the following are all in place to trigger an entry at the open of the next bar:

MACD <= -.40
Stoch SlowK <= .20 and SlowD <= .20
Volume >= 10,000

exit rule
exit when SlowK goes above .20

This model is built on the basic rules outlined in the beginner rockets document. Further refinements will include volume analysis on lower time frames in an effort to model wash trades when no follow thru is evident at decision time.

 

[oddiduro]

Quote from Chicken Little:

I am trying to compare automated with manual. If the automated
is not correct, the comparison would be invalid. The set of rules incorporated into the model are as follows:

Decisions are made at bar ends to be executed immediately on the open of the next bar. For sell triggers such as generated today the following are all in place to trigger an entry at the open of the next bar:

MACD <= -.40
Stoch SlowK <= .20 and SlowD <= .20
Volume >= 10,000

exit rule
exit when SlowK goes above .20

This model is built on the basic rules outlined in the beginner rockets document. Further refinements will include volume analysis on lower time frames in an effort to model wash trades when no follow thru is evident at decision time.

This is why I hinting at 666 that backtesting will fail this method. When volume > 10000, the system needs to enter AT THAT TIME.

If the MACD is correct, and the stoc is correct, then if volume is correct the trade needs to be entered on the next 2 pair. I don't know of a backtester that can do this. Assumptions need to be made with a backtester that do not reflect what the method tells you to do.

This model will fail in a non-trending market because to the end of bar entries.

Best Regards
Oddi

 

[easyrider]

When macd and sto are pointing toward a rocket and prv is fast I then start looking for a LOGICAL entry point. It has nothing to do with the current bar. It will usually be a sell stop under the hod/lod or above/below two or more bars indicating some s/r. Here are my rocket entry points for today. The middle two were small losers.

 

[oddiduro]

Quote from easyrider:

When macd and sto are pointing toward a rocket and prv is fast I then start looking for a LOGICAL entry point. It has nothing to do with the current bar. It will usually be a sell stop under the hod/lod or above/below two or more bars indicating some s/r. Here are my entry points for today. The middle two were small losers.

I think dawg does the same thing. The point that I was trying to make is that a backtester is no comparison to the human brain.

Thanks for showing yet another winning rocket, easy.

 

[Chicken Little]

Thanks Easyrider and oddiduro for both posts. I am trying to sort out everything required . The beginner rockets document is sorely lacking if one needs to add stuff to it before starting. I am trying to go step by step and not jump ahead to more expert variations on it before exploring the basics.

For the first variation, I am considering using 1 min bars to "look inside" the 5 min bar to execute at at more appropriate time as you suggest Oddi. The 1 min, 5 min setup would be used for that since as I posted earlier you can have a 1 min chart displaying the MACD & STOCH values from the 5 min data. We could use the volume accumulation "intra bar" (5 min basis) to enter as noted.

 

[Chicken Little]

As to monitoring real time in manual mode, I noted today that the requisite conditions can switch on and off rapidly due to the slowK calc.

For example, at some point during the 5 min bar the prv is greater than required , the MACD is satisfied and the stoch is on the line. Uptic and the Stoch is greater than 20, downtic and the stoch is less than 20. This could result in numerous 1 tic loss trades if a beginner literally took every signal tic by tic. How is the beginner advised to handle this ?

 

[oddiduro]

Quote from Chicken Little:

As to monitoring real time in manual mode, I noted today that the requisite conditions can switch on and off rapidly due to the slowK calc.

For example, at some point during the 5 min bar the prv is greater than required , the MACD is satisfied and the stoch is on the line. Uptic and the Stoch is greater than 20, downtic and the stoch is less than 20. This could result in numerous 1 tic loss trades if a beginner literally took every signal tic by tic. How is the beginner advised to handle this ?

Everyone handles this differently. I personally take the signal. If it is false, there are ways to get out . I am wrong if price crosses the bottom of the preceding bar.

Edit: IF 1/ IF 2 is one method that can be used. This means that the trade should not take place unless price has improved past the close of the prior bar, and all other requirements have been met as well.

Best Regards
Oddi

 

[foible]

Does anyone have any experience trading Rockets with equities? I've heard people mention this, but haven't been able to get it to work in practice. I notice that many of the setups on the 5min chart get confuzzled by the natural intraday movement which doesn't translate well into indicators (initial move - retrace - lunch dryup - breakout).

If one wants to try this with equities, does anyone have any suggestions for how to select the stocks, and what changes may need to be made? Is the 5 min chart still applicable, or is the 10 or 15 min better? Has anyone found any writings from Jack about applying this strategy to equities?

 

[Chicken Little]

Quote from oddiduro:

Everyone handles this differently. I personally take the signal. If it is false, there are ways to get out . I am wrong if price crosses the bottom of the preceding bar.

Edit: IF 1/ IF 2 is one method that can be used. This means that the trade should not take place unless price has improved past the close of the prior bar, and all other requirements have been met as well.

Best Regards
Oddi

Thanks Oddiduro. I will put that down as another thing to explore on the refinement path.

 

[Chicken Little]

Quote from oddiduro:

This is why I hinting at 666 that backtesting will fail this method. When volume > 10000, the system needs to enter AT THAT TIME.

If the MACD is correct, and the stoc is correct, then if volume is correct the trade needs to be entered on the next 2 pair. I don't know of a backtester that can do this. Assumptions need to be made with a backtester that do not reflect what the method tells you to do.

This model will fail in a non-trending market because to the end of bar entries.

Best Regards
Oddi

Oddiduro,

Do you wait intrabar till volume is >= 10,000 or if intrabar pro rated volume is at the run rate of >= 10,000 ?

For example if the stoch is go and the macd is go and 1 min has elapsed and the volume for the 1 min is 2000 then is the trade a go ? I believe the concept of pro rating the volume is somewhere or other in a hershey thread. The beginner rockets document doesnt address the pro rated volume so perhaps in beginner mode I should just wait till the 5 min bar totals >-10,000. Thanks.