Spydertrader's Jack Hershey Equities Journal II

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Quote from chapper:

Spyder, given that BTUI is showing up in the DU Scan for today, would you say that maybe you were ahead of the curve a bit?
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I have been thinking about this and wanted to implement it into my trading. I have thought about maybe entering on DU and then catching the first dominant volume switch.

The question comes down to end effects of the prior down trend and beginning effects of the new trend. Is breaking the proir trend line sufficient for entry into the new trend? their are 2 possibilites out of the prior trend which could appear; lateral or long(resumption also). How does one eliminate one and do you enter after that has been elimated or do you enter just on the prior trendline break.

I find that if I enter too early, i get whipsawed in the beginning effects of the new trend I am entering. How does one enter only when a true established long trend has occured but before the dominant volume switch?

I would be very appreciative if we could answer these pertinent questions.
 
For those interested, I was flat last month although the market offered a lot of cash specifically in the last 2 weeks.

I also have an investors.com subscirption and find their market commentary very helpful for those interested in getting the big picture in conjunction to what we are doing.
 
After looking at the stop offset ideas, I've come up with a very preliminary method that may take some of the subjectivity out of the process.

I am "trendline challenged" as others have also metioned. My trendlines tend not to look like what others come up with. So, I've tried to make the process of calculating offset more objective.

My method, using Tradestation, looks for 20% moves over 8 days on a 30 minute chart; calculates a trendline and bands that are offset N std deviations above and below. It then averages excursions of these bands. I plan to consider using these as the offset values.

Now for some charts of HANS:

First chart is used to calculate the average offset. It comes to 3.0.
The second chart, for a trade I entered on 3/2 at 902am at 98.3 shows (yellow line) the stop offset.

This changes the way you determind the amount of stock to buy. For the HANS example, the initial stop is now 7% below the entry point.

At this point, it looks reasonable.

HOpefully, some of you might want to take this further.

Doug

ps-the 2nd chart is in the next post.
 

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In the time frame I'm trading (i.e. 1/2 dailies) I enter only the channels that are in the same direction with the next higher time frame channel. I enter after the price bounces from the right line, then I exit close enough of the left line (I shoot for at least 50% of the right-to-left traverse). I stay out from that market until after the price bounces again from the right line. I monitor lower time frames channels too, but I try not to get distracted.
Quote from tradingbug:

I have been thinking about this and wanted to implement it into my trading. I have thought about maybe entering on DU and then catching the first dominant volume switch.

The question comes down to end effects of the prior down trend and beginning effects of the new trend. Is breaking the proir trend line sufficient for entry into the new trend? their are 2 possibilites out of the prior trend which could appear; lateral or long(resumption also). How does one eliminate one and do you enter after that has been elimated or do you enter just on the prior trendline break.

I find that if I enter too early, i get whipsawed in the beginning effects of the new trend I am entering. How does one enter only when a true established long trend has occured but before the dominant volume switch?

I would be very appreciative if we could answer these pertinent questions.
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to become UN-channel drawing challenged, it would be helpful to study how to draw channels... jack's postings and documents on futures channels will help with this.

his suggestion of printing out 100 days of the 5 min ES and drawing all the channels and traverses (not omitting volume from the chart of course) will get you to a comfortable place where you can draw channels and remove the belief that they are 'subjective'.

i re-drew your 30 min hans the best i could.

I would highly recommend reading the offset doc and applying what it says to your excercise.
we look for 'long bars' on the 30 min, however we look for the offset from the daily chart.

those excursions you cited, are not really what we're looking for, in my opinion

none of this is a right or wrong thing i suppose. i am visually oriented, not really maths oriented.
 

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My take on HANS's channels and stop offset line using 1/2 day bars, attached.
Quote from Dantheman:

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i re-drew your 30 min hans the best i could.
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Good discussion with respect to channels. I have to keep at it myself in order to practice consistently drawing the correct channels. On too many occasions last year, I found myself entering at the high side of the channel. Many of those trades turned into losses. Also, a well drawn channel helps with correctly anticipating the next upturn in price - at least in my experience.

- Spydertrader
 
I agree spyder. I found that while I was picking stocks that made 10 % moves, I was entering a little late for the ride. If these stocks came up on my list the night before and I was monitoring them, I should be able to pick them off earlier. Maybe right before the real volume comes in. I am trying to bear down on trend endings and trend begininngs. I think the transition is sometimes slow and sometimes fast and worth deciphering.

While I didnt do well last month performace wise, I think this step back will allow for a nice step forward.

Have a great weekend spyder.
 
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