Spydertrader's Jack Hershey Equities Journal II
- Thread starter Spydertrader
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In an effort to assist in the transition toward improved rates of return, I have, on occasion, added additional Hershey Set-ups (other than the DU ---> FRV ---> Peak Paradigm) to Journal Two. Trading Equities 'Rockets' falls into this same category. Some discussion recently developed on another thread regarding Jack's 'High Noon' Post written Friday, Jun 21 2002. (N.B. The Stochastic Setting of (5,3,3) in the linked post is our Stochastic (5,2,3) Setting). I have attached a current Daily Chart for GROW showing how one could use Jack's 'Bruno R' and 'High Noon' entry and hold rules to obtain far greater profits. A review of all Final Universe Stocks reveals several equities which may show signs of fitting into this set up. As with all new methods, I recommend exercising caution before jumping in with both feet.
Some might consider the 'Bruno R' and 'High Noon' posts more applicable to Intermediate Level traders based on their risk assessment. Clearly, use of the DU ---> FRV ---> Peak Paradigm, and Jack's recommendation for, "Getting in Late & Leaving Early" with respect to entry and exit, carries far less risk for the new trader. However, in an effort to improve everyone's overall rates of return, I wanted to open the discussion up to these Intermediate Methods in addition to our Beginner Methods discussions initiated in Journal One.
As a result, I continue to encourage input from all interested parties - irrespective of experience level. Whether just starting out studying Hershey Methodology, Veteran Hershey Trader, or an experience level falling somewhere in between, all benefit from an open dialogue across the wide spectrum of Jack's methods.
I hope you find the above information useful.
- Spydertrader
Some might consider the 'Bruno R' and 'High Noon' posts more applicable to Intermediate Level traders based on their risk assessment. Clearly, use of the DU ---> FRV ---> Peak Paradigm, and Jack's recommendation for, "Getting in Late & Leaving Early" with respect to entry and exit, carries far less risk for the new trader. However, in an effort to improve everyone's overall rates of return, I wanted to open the discussion up to these Intermediate Methods in addition to our Beginner Methods discussions initiated in Journal One.
As a result, I continue to encourage input from all interested parties - irrespective of experience level. Whether just starting out studying Hershey Methodology, Veteran Hershey Trader, or an experience level falling somewhere in between, all benefit from an open dialogue across the wide spectrum of Jack's methods.
I hope you find the above information useful.
- Spydertrader
RE: Rockets
I've been trading these for a short time now, using the 5,2,3 stochastic and see good success. I've posted a few of my trades and candidates. Although I don't have the 50 trades I like to draw conclusions regarding performance, so far they seem to perform about as well as the basic trades. I see adding "Rocket" stocks as a way to have more candidates each day to trade.
On Friday, my candidates were:
JOYG
STMP
MDR
GROW
I did not take any trades but FWIW, they all went up in price on the day.
I do select these from a much larger universe compared to the basic universe, as Jack suggests:
"To find a rocket you only have to have your quality universe (they are very high quality stocks with EPS and RS at 80 to 90 percentiles each."
More daily candidates to trade to me means more chances to profit.
DS
I've been trading these for a short time now, using the 5,2,3 stochastic and see good success. I've posted a few of my trades and candidates. Although I don't have the 50 trades I like to draw conclusions regarding performance, so far they seem to perform about as well as the basic trades. I see adding "Rocket" stocks as a way to have more candidates each day to trade.
On Friday, my candidates were:
JOYG
STMP
MDR
GROW
I did not take any trades but FWIW, they all went up in price on the day.
I do select these from a much larger universe compared to the basic universe, as Jack suggests:
"To find a rocket you only have to have your quality universe (they are very high quality stocks with EPS and RS at 80 to 90 percentiles each."
More daily candidates to trade to me means more chances to profit.
DS
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1047602>
Appreciate your dedication to consistently post your adventures.
I am new to the Hershey method and am trying to understand it. Question for you: I understand that the higher the "rank" value, the more stronger or frequent the stock moves. Can you pls explain what "score" means and whether there is a correlation using both scores to provide better entry/winning trades? i.e. can the sum total provide the entry/exit signals?
I have attempted to alter a chartscript written by you and other people so that the "in dry up" alert shows up with the "score" (my next attempt is to add "ranking" with it) Here it is:
var mo1, mo2, mo3, mo4, mo5, RETRACE, F, COUNT, LASTLOWBAR, BAR, X, CYCLELENGTH, DAYS, DAYS1, DAYS2, DAYS3, DAYS4, DAYS5, DIVIDEBY, DUSignal : integer;
var N, PV, DU, DU1, DU2, DU3, DU4, DU5, GAIN, GAIN1, GAIN2, GAIN3, GAIN4, GAIN5, AVERAGEGAIN, AVERAGEDU, curvol, DUBAND, DUHigh, DULow : float;
mo1:=BARCOUNT() -1 ;
mo2:=BARCOUNT() -21 ;
mo3:=BARCOUNT() -41 ;
mo4:=BARCOUNT() -61 ;
mo5:=BARCOUNT() -81 ;
RETRACE := 1;
F:=40;COUNT:=0;LASTLOWBAR :=1000000;
FOR BAR:= BARCOUNT() -1 DOWNTO BARCOUNT()-127 do
BEGIN
IF LASTLOWBAR < BAR THEN BAR:= LASTLOWBAR ;
X:= PEAKBAR(BAR, #HIGH, RETRACE) ;
N:= PEAK(BAR, #HIGH, RETRACE) - LOWEST(X-1, #LOW, 5) ;
IF N/LOWEST(X-1, #LOW, 5) >= 0.20 THEN CYCLELENGTH:= 5 ELSE
BEGIN
X:= PEAKBAR(BAR, #HIGH, RETRACE) ;
N:= PEAK(BAR, #HIGH, RETRACE) - LOWEST(X-1, #LOW, 6) ;
IF N/LOWEST(X-1, #LOW, 6) >= 0.20 THEN
CYCLELENGTH:= 6 ELSE
BEGIN
X:= PEAKBAR(BAR, #HIGH, RETRACE) ;
N:= PEAK(BAR, #HIGH, RETRACE) - LOWEST(X-1, #LOW, 7) ;
IF N/LOWEST(X-1, #LOW, 7) >= 0.20 THEN
CYCLELENGTH:= 7;
END;
END;
IF N/LOWEST(X-1, #LOW, CYCLELENGTH) >= 0.20 THEN
BEGIN
DAYS:= PEAKBAR(BAR, #HIGH, RETRACE) - LOWESTBAR(X-1, #LOW, CYCLELENGTH)+1 ;
IF PRICECLOSE(PEAKBAR(BAR, #HIGH, RETRACE) ) < PRICECLOSE(PEAKBAR(BAR, #HIGH, RETRACE)-1 ) THEN
PV:= VOLUME(PEAKBAR(BAR, #HIGH, RETRACE)-1 ) ELSE PV:= VOLUME(PEAKBAR(BAR, #HIGH, RETRACE) ) ;
F:=F+10;
LASTLOWBAR:=LOWESTBAR(X-1, #LOW, CYCLELENGTH)-1 ;
COUNT:= COUNT+1;
IF COUNT=1 THEN BEGIN
GAIN1:=N/LOWEST(X-1, #LOW, CYCLELENGTH) ;DAYS1:=DAYS;DU1:=LOWEST(mo1, #VOLUME, 20);
END;
IF COUNT=2 THEN BEGIN
GAIN2:=N/LOWEST(X-1, #LOW, CYCLELENGTH) ;DAYS2:=DAYS;DU2:=LOWEST(mo2, #VOLUME, 20);
END;
IF COUNT=3 THEN BEGIN
GAIN3:=N/LOWEST(X-1, #LOW, CYCLELENGTH) ;DAYS3:=DAYS;DU3:=LOWEST(mo3, #VOLUME, 20);
END;IF COUNT=4 THEN BEGIN
GAIN4:=N/LOWEST(X-1, #LOW, CYCLELENGTH) ;DAYS4:=DAYS;DU4:=LOWEST(mo4, #VOLUME, 20);
END;
IF COUNT=5 THEN BEGIN
GAIN5:=N/LOWEST(X-1, #LOW, CYCLELENGTH) ;DAYS5:=DAYS;DU5:=LOWEST(mo5, #VOLUME, 20);
AVERAGEGAIN:= (GAIN1+GAIN2+GAIN3+GAIN4+GAIN5)/5 ;
IF DU1>0 THEN DIVIDEBY:=1;
IF DU2>0 THEN DIVIDEBY:=2;
IF DU3>0 THEN DIVIDEBY:=3;
IF DU4>0 THEN DIVIDEBY:=4;
IF DU5>0 THEN DIVIDEBY:=5;
AVERAGEDU:= (DU1+DU2+DU3+DU4+DU5)/DIVIDEBY;
curVol := VOLUME(Barcount-1);
DUBand := AVERAGEDU*(4986/10000);
DUHigh := AverageDU + DUBand;
DULow := AverageDU - DUBand;
END;
IF COUNT = 5 THEN BREAK;
END;
END;
DUSignal:=CreateSeries();
for Bar := 1 to BarCount - 1 do
begin
IF DUHigh > curvol THEN SetSeriesValue( Bar, DUSignal, 1 );
end;
for Bar := barcount-5 to BarCount - 1 do
begin
EnableTradeNotes( false, false, false );
if not LastPositionActive then
begin
if GetSeriesValue( Bar, DUSignal ) > 0 then
BuyAtMarket( Bar+1,'In Dry Up');
SellAtMarket(Bar+1, LastPosition, 'DU Detected');
end;
end;
function calcPVADScore() : integer;
begin
var Score : integer = 0 ;
var BopTBSeries : integer = SMASeries( BOPSeries, 1 );
if (@#Close[BarCount - 1] > 1.01 * @#Close[BarCount - 2]) then
Score := Score + 4;
if (@#volume[BarCount - 1] > 1.10 * @#volume[BarCount - 2]) then
Score := Score + 2;
if @BopTBSeries[Barcount - 1] > 0.30 then
Score := Score + 1;
Result := Score;
end;
var PVADScore : integer = calcPVADScore ;
Bar := BarCount - 1;
BuyAtMarket( Bar+1,'Score: ' + FormatFloat( '0' ,PVADScore ));
Cheers!
P.S.
CNTF shows a 7 rank; REDF and SFCC has 6s' but looks like only SFCC would be a good trade based on the stoch and MACD reversing...
I am new to the Hershey method and am trying to understand it. Question for you: I understand that the higher the "rank" value, the more stronger or frequent the stock moves. Can you pls explain what "score" means and whether there is a correlation using both scores to provide better entry/winning trades? i.e. can the sum total provide the entry/exit signals?
I have attempted to alter a chartscript written by you and other people so that the "in dry up" alert shows up with the "score" (my next attempt is to add "ranking" with it) Here it is:
var mo1, mo2, mo3, mo4, mo5, RETRACE, F, COUNT, LASTLOWBAR, BAR, X, CYCLELENGTH, DAYS, DAYS1, DAYS2, DAYS3, DAYS4, DAYS5, DIVIDEBY, DUSignal : integer;
var N, PV, DU, DU1, DU2, DU3, DU4, DU5, GAIN, GAIN1, GAIN2, GAIN3, GAIN4, GAIN5, AVERAGEGAIN, AVERAGEDU, curvol, DUBAND, DUHigh, DULow : float;
mo1:=BARCOUNT() -1 ;
mo2:=BARCOUNT() -21 ;
mo3:=BARCOUNT() -41 ;
mo4:=BARCOUNT() -61 ;
mo5:=BARCOUNT() -81 ;
RETRACE := 1;
F:=40;COUNT:=0;LASTLOWBAR :=1000000;
FOR BAR:= BARCOUNT() -1 DOWNTO BARCOUNT()-127 do
BEGIN
IF LASTLOWBAR < BAR THEN BAR:= LASTLOWBAR ;
X:= PEAKBAR(BAR, #HIGH, RETRACE) ;
N:= PEAK(BAR, #HIGH, RETRACE) - LOWEST(X-1, #LOW, 5) ;
IF N/LOWEST(X-1, #LOW, 5) >= 0.20 THEN CYCLELENGTH:= 5 ELSE
BEGIN
X:= PEAKBAR(BAR, #HIGH, RETRACE) ;
N:= PEAK(BAR, #HIGH, RETRACE) - LOWEST(X-1, #LOW, 6) ;
IF N/LOWEST(X-1, #LOW, 6) >= 0.20 THEN
CYCLELENGTH:= 6 ELSE
BEGIN
X:= PEAKBAR(BAR, #HIGH, RETRACE) ;
N:= PEAK(BAR, #HIGH, RETRACE) - LOWEST(X-1, #LOW, 7) ;
IF N/LOWEST(X-1, #LOW, 7) >= 0.20 THEN
CYCLELENGTH:= 7;
END;
END;
IF N/LOWEST(X-1, #LOW, CYCLELENGTH) >= 0.20 THEN
BEGIN
DAYS:= PEAKBAR(BAR, #HIGH, RETRACE) - LOWESTBAR(X-1, #LOW, CYCLELENGTH)+1 ;
IF PRICECLOSE(PEAKBAR(BAR, #HIGH, RETRACE) ) < PRICECLOSE(PEAKBAR(BAR, #HIGH, RETRACE)-1 ) THEN
PV:= VOLUME(PEAKBAR(BAR, #HIGH, RETRACE)-1 ) ELSE PV:= VOLUME(PEAKBAR(BAR, #HIGH, RETRACE) ) ;
F:=F+10;
LASTLOWBAR:=LOWESTBAR(X-1, #LOW, CYCLELENGTH)-1 ;
COUNT:= COUNT+1;
IF COUNT=1 THEN BEGIN
GAIN1:=N/LOWEST(X-1, #LOW, CYCLELENGTH) ;DAYS1:=DAYS;DU1:=LOWEST(mo1, #VOLUME, 20);
END;
IF COUNT=2 THEN BEGIN
GAIN2:=N/LOWEST(X-1, #LOW, CYCLELENGTH) ;DAYS2:=DAYS;DU2:=LOWEST(mo2, #VOLUME, 20);
END;
IF COUNT=3 THEN BEGIN
GAIN3:=N/LOWEST(X-1, #LOW, CYCLELENGTH) ;DAYS3:=DAYS;DU3:=LOWEST(mo3, #VOLUME, 20);
END;IF COUNT=4 THEN BEGIN
GAIN4:=N/LOWEST(X-1, #LOW, CYCLELENGTH) ;DAYS4:=DAYS;DU4:=LOWEST(mo4, #VOLUME, 20);
END;
IF COUNT=5 THEN BEGIN
GAIN5:=N/LOWEST(X-1, #LOW, CYCLELENGTH) ;DAYS5:=DAYS;DU5:=LOWEST(mo5, #VOLUME, 20);
AVERAGEGAIN:= (GAIN1+GAIN2+GAIN3+GAIN4+GAIN5)/5 ;
IF DU1>0 THEN DIVIDEBY:=1;
IF DU2>0 THEN DIVIDEBY:=2;
IF DU3>0 THEN DIVIDEBY:=3;
IF DU4>0 THEN DIVIDEBY:=4;
IF DU5>0 THEN DIVIDEBY:=5;
AVERAGEDU:= (DU1+DU2+DU3+DU4+DU5)/DIVIDEBY;
curVol := VOLUME(Barcount-1);
DUBand := AVERAGEDU*(4986/10000);
DUHigh := AverageDU + DUBand;
DULow := AverageDU - DUBand;
END;
IF COUNT = 5 THEN BREAK;
END;
END;
DUSignal:=CreateSeries();
for Bar := 1 to BarCount - 1 do
begin
IF DUHigh > curvol THEN SetSeriesValue( Bar, DUSignal, 1 );
end;
for Bar := barcount-5 to BarCount - 1 do
begin
EnableTradeNotes( false, false, false );
if not LastPositionActive then
begin
if GetSeriesValue( Bar, DUSignal ) > 0 then
BuyAtMarket( Bar+1,'In Dry Up');
SellAtMarket(Bar+1, LastPosition, 'DU Detected');
end;
end;
function calcPVADScore() : integer;
begin
var Score : integer = 0 ;
var BopTBSeries : integer = SMASeries( BOPSeries, 1 );
if (@#Close[BarCount - 1] > 1.01 * @#Close[BarCount - 2]) then
Score := Score + 4;
if (@#volume[BarCount - 1] > 1.10 * @#volume[BarCount - 2]) then
Score := Score + 2;
if @BopTBSeries[Barcount - 1] > 0.30 then
Score := Score + 1;
Result := Score;
end;
var PVADScore : integer = calcPVADScore ;
Bar := BarCount - 1;
BuyAtMarket( Bar+1,'Score: ' + FormatFloat( '0' ,PVADScore ));
Cheers!
P.S.
CNTF shows a 7 rank; REDF and SFCC has 6s' but looks like only SFCC would be a good trade based on the stoch and MACD reversing...
Thank you for posting your work with Wealth Lab. I appreciate the contribution.
A stock's Score represents the sum of the Price, Volume, Accumulation / Distribution (PVAD) Formula. In Journal One, I posted several examples of how using a binary scoring function for each variable calculates the over score for an individual equity. Each individual score corresponds to a location on the natural cycle for a specific equity. The attached chart provides a graphic representation of the PVAD Scoring Cycle. Journal One provides a more detailed explanation. One trader posted his Wealth-lab code for entering trade based on two different Scores. You might find his results interesting.
I hope the above helped.
- Spydertrader
<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1047644>
Spydertrader, would you say that the rockets described in the Bruno R post have to meet the same criteria as the regular Hershey equity method? i.e. price, float, volume, eps rank, rs rank. Also, should the rockets have rank a la the equity rank scan in wealth-lab?
Jack was somewhat vague and just said he used a "quality universe" but I'm not sure how stringently he defined this.
Jack was somewhat vague and just said he used a "quality universe" but I'm not sure how stringently he defined this.
As we have noticed many times, different traders use various methods to obtain a"Quality Universe." Whether one uses, stocktables.com data, the IBD web site, a Gallas2 type MSN Screener, TC2000 or some other method for obtaining the initial Universe, I recommend continuing to use those same methods as done in the past. I view these 'Bruno R' and 'High noon' posts as descriptions of 'set-ups' which allow the trader to view "Tomorrow's Newspaper, Today". Price, Float, Earnings, Volume and Cycles all provide the Hershey Equities System's fundamental building blocks which inherently reduce overall risk. William O'Neil speaks to this very fact in many of his books. Jack uses his TC2000 equations, and he also recommends using either Stocktables.com or the IBD Web Site to obtain a universe of "High Quality Equities." I recommend continuing to use the same culling parameters used in the past.
Interestingly, Jack has also recommended adding another culling parameter to the culling process - > 25% insider owned. Not to be confused with % institutional owned (where large funds and firms own a percentage of the shares), Insider Owned refers to the amount of stock owned by the company Managers and Directors. Jack recommends trading companies which have greater than 25% of their shares owned by such individuals. Applying this criterion to our current Final Universe removes nearly two-thirds of the equities. However, trades placed with the remaining companies show a greatly improved number of profitable trades (based on current backtesting of data [using Bruno R methods] from January 1 until present). The trade off comes when we see using the > 25% Insider Owned parameter significantly reduces the number of available equities from which we can hope to receive a trade signal. In other words, while the win rate improves, the number of overall trades reduces. I have made no changes to my Final Universe based on this parameters (at this time), although additional testing should prove quite interesting.
One can easily obtain The "Percent Insider Owned" Number via QCharts or by visiting Quote.com under the "Insider Trading" Headline. I have included the page for HANS through this link.
I hope you find the above information useful.
- Spydertrader
So it sounds like the same final universe stocks we use for the normal Hershey trading are the same for rockets. The difference is that these are final universe stocks where the stoch has plunged to < 20%?
Also aren't the "Bruno R" and "High Noon" postings the same?
Also aren't the "Bruno R" and "High Noon" postings the same?
Correct. Bruno R refers to stocks which have had their stochastics fall below the 20 level (or in that range) on the Stochastics. With respect to 'High Noon,' I should have made the clarification that Jack provided in his posts in the other treads. He recommended using Stochastics (5,2,3) for entry and Stochastics (14,1,3) for 'hold' or exits. However, the posts to which the clarifications occur, come from the same discussion. I simply linked to the wrong location. I apologize for any confusion. Here is the Clarification provided by Jack.
- Spydertrader
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