Jack Hershey's trading methods

Thought Id post this chart as it looks like an ideal rocket coming up and in fact I was watching intently but the one thing missing was the volume. Macd was crossing .4, Sto was over 80, and price was at the hod, but as you can see on the timer, prorata volume for the 5 minute bar was only about 1k half way through the bar and never did get over the 10k line through the entire false breakout.
 

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Thanks easyrider. So you didn't take this trade because the PRV showed a flaw ...
Quote from easyrider:

Thought Id post this chart as it looks like an ideal rocket coming up and in fact I was watching intently but the one thing missing was the volume. Macd was crossing .4, Sto was over 80, and price was at the hod, but as you can see on the timer, prorata volume for the 5 minute bar was only about 1k half way through the bar and never did get over the 10k line through the entire false breakout.
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Quote from cnms2:

Thanks easyrider. So you didn't take this trade because the PRV showed a flaw ...
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Right. I took the snapshot as it was happening so that I wouldnt be accused of hindsight. The parameters for these trades will keep you out of trouble if you learn them. It does not seem to occur to some people that it might just be possible that they (god forbid) might not understand how something works because they cannot fit it into some preconcieved mold they have in place for any number of reasons. Its really too bad.
 
Quote from Aok:

Easy,

What are the settings for MACD and FStoc?

I have seen several in different threads.

Thanks.
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Jack recommends 5, 13, 6 for the macd and 14, 3, 1 for the stochastic. I have experimented with many different settings but always come back to these because they seem to work the best. The only thing I do different is use 14, 3, 2 for the stochastic as it smoothes it out a bit and doesnt seem to change anything.
Some people include the 5, 3, 2 stochastic but i never did figure out how to use it correctly. Jack also uses the histogram of the macd for the trend setting while i use the slow line as it seems to work better for me.
 
I feel your pain ... :)

I know how it feels when you face an unreceptive or maybe hostile audience, and you feel compelled to make your point crystal clear, leave no possibility of doubt or misinterpretation.
Quote from easyrider:

Right. I took the snapshot as it was happening so that I wouldnt be accused of hindsight. The parameters for these trades will keep you out of trouble if you learn them. It does not seem to occur to some people that it might just be possible that they (god forbid) might not understand how something works because they cannot fit it into some preconcieved mold they have in place for any number of reasons. Its really too bad.
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Grob109


Registered: Aug 2003
Posts: 2513


05-19-06 04:08 PM

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Your first job in the crow's nest is to do 100 wash trades. If you can't get back to your original entry price because of profits don't worry; take the trade and just call it a wash and send your mom (not your DAD, he doesn't understand trading) the profits.

The first 20 will be tough and you will figure out soon not to take too long to wash. By trade 42, you will feel your shoulders are not really stiff dead unmoveable wings that lost their feathers (you are in the crows nest and have forgotten about falling off the edge of the earth by now). After trade 50 you are allow to look around for coconuts but be damn sure you are washing every damn time and not taking those profits that are appearing.

By trade 67, you are getting damn susspicious about how you can get a successful wash if you enter at the right time. Okay look up for albatrosses and down for stormy petrels. If you see a bird with a crossed tail feathers tell Columbus to head a little farther north.

By trade 81 you are counting how many more you have to do and this has taken about five days so far (the QM2 and QE2 take a little over 6 days). Draw a line through yesterday and pick off at least 10 along that line alone. Draw a new line out ahead and do every one that crosses for each direction of the cross for today. Go for washes that make a couple of ticks each time and see if you can set a crow's nest record.

At 100 you can say that the earth has no edge to fall off of. And you will not be able to clearly remember .....fear....uncertainty.... and doubt.

Drill two is to enter and then, slowly, look for the best entry in the opposite direction. Stay in the original entry until you a damn sure the one you have found is really super, then take it right after you close out the prior entry. Do this 100 times and do not exceed 20 times a day. Do this on the way back from the Carribean. Keep sending the money to your mom. Fuck your dad, he was bugging you a lot about a lot of things anyway.

I know you won't do any of this because you are so fixated on fear and the fear seeds. And, moreso, that they have a cure.

The moral of the story (east to West) is that, you can exit any entry and not fall off the edge of the earth or even have to lose any money. And not so important (West to East), almost any entry will make you some money despite yourself.

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You can read the full post here.
 
Quote from cnms2:

You can read the full post here.
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The second exercise is actually an extremely powerful strategy to rewire the neurons correctly. Often times when traders get stopped out or close out a position with a loss, they have difficulty instantly taking a good counter directional trade signal because of an emotional attachment to the most recent prior position.


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Drill two is to enter and then, slowly, look for the best entry in the opposite direction. Stay in the original entry until you a damn sure the one you have found is really super, then take it right after you close out the prior entry. Do this 100 times and do not exceed 20 times a day. Do this on the way back from the Carribean. Keep sending the money to your mom. Fuck your dad, he was bugging you a lot about a lot of things anyway.
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....better to do the first exercise in a real time demo account, probably helpful for those who have a fear of putting on a position.
 
See bellow my three month expectancy and money management numbers. (from the Money Management thread)
Quote from cnms2:

Update:

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1084681>
Quote from cnms2:

During March I run some of my trades in parallel on stock shares and stock options.

I sized my stock position based on my stop loss then rounded it to 100's. I also bought one near in-the-money options contract for each 100 shares (calls for long stock, puts for short stock). I used market and stop orders, and entered and exited both the stock and options positions at the same time.

March results are as follows (R is the stop loss risk):

<center><img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1026187></center>

Notes:
  • the average win was larger when trading shares
  • the average loss was about the same for shares and options; this was caused by the larger options' slippage
  • expectancy and Kelly ratio are higher when trading shares, but there is a "hidden" risk for an outlier loss
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Good to see Jacks work is alive and well, cnms2.

I'm exploring Jacks CCC theory (Congestion, Convergence, and Centering) as a filter for an automated FX system.

I already use a 'centering' indicator (low volatility/flat price action) as a predictive breakout filter, with success.

What I'd like to see is annotated PICS of actual congestion, convergence and centering sequences.

This would prove far more useful than the uh....overly verbose replies? that are routinely offered to such questions.

If anyone could post a few charts and quickly mark on them areas of congestion, convergence and centering, I would truly be grateful.


After seeing a few CCC sequences marked correctly, I'll have a much better idea of what Jack is talking about and what to look for.

Pictures are worth a thousand words.

Btw, i work a full time day job so forgive me if it takes a few days to respond.

Thanks so much.
 
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