This thread is a good place to start for all the beginners looking to learn the Jack Hershey methods for index futures daytrading.
He posted this exercise back in 2000 and recently he said it was still a very good beginning method. So lets get started.
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Quote from Grob109:
arch
I advocate that drills in markets using practice sessions where the person works at his pace and doing such with real time market data where a person is subject to sharing with the market is the way to rapidly gain, through experience, the knowledge and skills for optimizing making money in the market.
Market knowledge and skills come from the market. Tapping this is done by drills.
Then comes the payoffs. By staying in the market through the day, you open the opportunity to periodically take profits. Optimizing this comes from improvement which comes as a result of iterative refinement.
Playing in your rock, scissors, paper play pen is something you are prone to do not me.
I see you are planning to do something sometime. Go for it. You may even turn out to help someone sometime.
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Here is a specific drill which Grob109 recommends for trading any index contract. It stays in the market continuously throughout the day and switches sides periodically.
from Jack Hershey Jun 2 2000, 3:00 am show options
Newsgroups: misc.invest.technical
From: "Jack Hershey"
Date: 2000/06/02
Subject: 30 minute warmup bar trading.
Fundamental Money Making Concepts.
I use simple mechanical systems to get people to understand the basic
concept of making money steadily and with little or no risk.
When you trade daily for 6 1/2 hours a key thing to consider is not doing
too much to make some money.
By choosing a futures index of any sort on any exchange in the world, you
have put yourself, for 6 1/2 hours a day in a place that is truly dull and
unexciting. Being there is fairly safe and not too demanding so you can
relax and repeat a few tasks over and over to make some money.
I work first with 30 minute bars to frankly eliminate any sense of urgency.
I use the prior days last bar to get the ball rolling, or I suggest you wait
until the second begins to eliminate the end effects of the market.
Here is a progression of four mechanical methods to illustrate making money
primarily and secondarily to illustrate that losses are neatly reduced more
and more as a little sophistication enters the picture. I also introduce
how in a trend you can switch to the most favorable side of the channel to
exit. Because this is very simple and mechanical there is no need to
clutter it with a stop system as yet mostly because it an index tied to the
performance of and aggregation of stocks. We can tuck stops in easily
though as a commitment to our ordinary discipline.
The four items in the progression are:
1. break out of prior bar.
2. slope pairs of bars.
3. overlapped pairs slopes
4. retracement.
Here is the progression:
1. set up a 30 bar display for a futures index.
2. enter on the breakout beyond (above or below) the prior days last bar
hi/lo.
3. hold until the current bar breaks out of the other end (from your long or
short entry) of the prior bar.
4. hold on inside bars.
5. hold on successive bar break outs in the same trend.
6. on breakout of 3., reverse so you can take on new trend trade.
7. repeat 3. through 6. for remaining bars of the day.
8. settle at end of day.
He posted this exercise back in 2000 and recently he said it was still a very good beginning method. So lets get started.
--------------------------------------------------------------------------------
Quote from Grob109:
arch
I advocate that drills in markets using practice sessions where the person works at his pace and doing such with real time market data where a person is subject to sharing with the market is the way to rapidly gain, through experience, the knowledge and skills for optimizing making money in the market.
Market knowledge and skills come from the market. Tapping this is done by drills.
Then comes the payoffs. By staying in the market through the day, you open the opportunity to periodically take profits. Optimizing this comes from improvement which comes as a result of iterative refinement.
Playing in your rock, scissors, paper play pen is something you are prone to do not me.
I see you are planning to do something sometime. Go for it. You may even turn out to help someone sometime.
--------------------------------------------------------------------------------
Here is a specific drill which Grob109 recommends for trading any index contract. It stays in the market continuously throughout the day and switches sides periodically.
from Jack Hershey Jun 2 2000, 3:00 am show options
Newsgroups: misc.invest.technical
From: "Jack Hershey"
Date: 2000/06/02
Subject: 30 minute warmup bar trading.
Fundamental Money Making Concepts.
I use simple mechanical systems to get people to understand the basic
concept of making money steadily and with little or no risk.
When you trade daily for 6 1/2 hours a key thing to consider is not doing
too much to make some money.
By choosing a futures index of any sort on any exchange in the world, you
have put yourself, for 6 1/2 hours a day in a place that is truly dull and
unexciting. Being there is fairly safe and not too demanding so you can
relax and repeat a few tasks over and over to make some money.
I work first with 30 minute bars to frankly eliminate any sense of urgency.
I use the prior days last bar to get the ball rolling, or I suggest you wait
until the second begins to eliminate the end effects of the market.
Here is a progression of four mechanical methods to illustrate making money
primarily and secondarily to illustrate that losses are neatly reduced more
and more as a little sophistication enters the picture. I also introduce
how in a trend you can switch to the most favorable side of the channel to
exit. Because this is very simple and mechanical there is no need to
clutter it with a stop system as yet mostly because it an index tied to the
performance of and aggregation of stocks. We can tuck stops in easily
though as a commitment to our ordinary discipline.
The four items in the progression are:
1. break out of prior bar.
2. slope pairs of bars.
3. overlapped pairs slopes
4. retracement.
Here is the progression:
1. set up a 30 bar display for a futures index.
2. enter on the breakout beyond (above or below) the prior days last bar
hi/lo.
3. hold until the current bar breaks out of the other end (from your long or
short entry) of the prior bar.
4. hold on inside bars.
5. hold on successive bar break outs in the same trend.
6. on breakout of 3., reverse so you can take on new trend trade.
7. repeat 3. through 6. for remaining bars of the day.
8. settle at end of day.