Spydertrader's Jack Hershey Equities Journal II
- Thread starter Spydertrader
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Sent you another PM.
- Spydertrader
I didn't receive an alert for GROW until much later in the morning when the stochastics had already headed south. I either didn't set my volume alert number correctly, or used a different volume level for my alert. I'm guessing I typed in the incorrect volume number as I have made that mistake before and missed out on a fast moving high flyer. I have since deleted my alerts, or I'd post the volume level I used for you here.
Don't worry too much about the stop outs. More often than not, the stops prevent additional losses. Today, two of my trades stopped out at almost the exact location price reversed and headed higher than my entry. Losses like these happen every once in a while.
- Spydertrader
Thanks for the fast reply...
Going back over the setup, I noticed that I hadn't taken into consideration where GROW was positioned wrt its channels on the daily chart - it is near the left side of the channel which makes the trade a higher risk proposition...
It is time to make a proforma checklist for making buy decisions to help ensure that all criteria have been assessed before a signal is taken.
I am not concerned that it was a loss, this is part and parcel of trading, just wanted to make sure that I was following the method correctly.
Cheers, and thanks for all your efforts regarding this methodology - I'm about 2/3rds of the way through the first journal, so still a lot to learn...
I must say your advice seems to be working, thanks again. I found that after reading the first 30 pages of Journal 1, I needed to take a dinner break and let things mull over in my head. Once I was halfway through dinner, everything seemed to click and I am starting to feel like I understand this.
I do have some questions though for things that are not as fully clear in my mind. I am trying to figure out why we are doing each step as we are doing it (if this is explained in the Jack H postings you listed, I apologize, as I haven't gotten to those and am following your advice of finishing Journal 1 first).
The original post has the following and I bolded my thoughts/questions throughout as my means of explaining the system to myself and seeking further explanation from others:
**********
Log onto the.... http://www.stocktables.com web site. You can utilize the two-week free trial to avoid paying for a subscription. The following settings will produce a list of stocks we will call the âinitial universe.â
RS > 80
EPS > 90
Dollar min 10
Max dollar 50.
Are the reasons for doing this that we want stocks that are fundamentally strong? The parameters seem to indicate to me that the stock is pretty sound... is this the logic behind this step?
All is everywhere else.
Sort by % Volume Change. We're basically looking for trends in volume before price outbreaks, so this step makes sense to me
Your initial list of stocks should total near 100. Alter the RS and EPS settings to achieve the number. We now create three lists. Each list signifies a score for the individual stock. The scoring process uses the Price, Volume and Accumulation / Distribution Is the Accumulation/Distrubtion a reflection of the Volume changes? relationship. Jack Hershey uses a binary scoring system. The stocktables.com web site version of Jackâs Methods creates three lists already scored â zeroâs, oneâs, and sevenâs.
The First list of 10 stocks comes from the bottom of the list working your way up, filtering out stocks with Volume < 200,000.
Ok, so we're looking for stocks that have dropped significantly in volume, makes sense
The Second list of ten stocks comes from the top and working down, selecting only stocks with price gains. So stocks that are climbing with prices climbing... is the logic behind this Jack's determined relationship between price and volume? These stocks have higher volumes and higher prices.
The Third list of 10 stocks comes from the middle of the stocktables.com chart where the volume change is zero. Take five stocks above and five below the middle zero selecting stocks that have greater than 200,000 volumes. What's the significance that the stocks have little volume change, but have over 200k volume? Why are we including these in our list of 30... the first 20 make more sense ATM.
The short list from the bottom I entered as portfolio "1's". The short list from the top I entered as portfolio "7's".
1's are the bottom ones. The top ones are 7's. The middle ones are 0's
Then rank all thirty of the above stocks (three lists of ten) using:
http://www.wealth-lab.com/cgi-bin/W...system?id=32994
Stocks that return no rank are given a rank of zero. Keep all the stocks that have a rank (other than zero), and sort them from highest to lowest rank.
You will then have created your top 10 "Hotlist"
Then you must: Eliminate any stocks that do NOT:
1. Have a float less than 60,000,000
2. Have a float greater than 5,000,000
3. Have a 65-day average volume above 200,000 shares
4. Have positive EPS.
So we're keeping stocks that are fairly solid financially, and from what I read on the float constraints, we don't want stocks that are highly volatile and easily thrown around by volume, nor do we want stocks with too high floats that won't move on volume... correct? The 65day avg volume above 200k probably indicates the the DU of the stock will be above 200k, so the stocks below 200k have easier chances of increasing to hit the DU (I believe these are the 1s)...
****************************************************
I do have some questions though for things that are not as fully clear in my mind. I am trying to figure out why we are doing each step as we are doing it (if this is explained in the Jack H postings you listed, I apologize, as I haven't gotten to those and am following your advice of finishing Journal 1 first).
The original post has the following and I bolded my thoughts/questions throughout as my means of explaining the system to myself and seeking further explanation from others:
**********
Log onto the.... http://www.stocktables.com web site. You can utilize the two-week free trial to avoid paying for a subscription. The following settings will produce a list of stocks we will call the âinitial universe.â
RS > 80
EPS > 90
Dollar min 10
Max dollar 50.
Are the reasons for doing this that we want stocks that are fundamentally strong? The parameters seem to indicate to me that the stock is pretty sound... is this the logic behind this step?
All is everywhere else.
Sort by % Volume Change. We're basically looking for trends in volume before price outbreaks, so this step makes sense to me
Your initial list of stocks should total near 100. Alter the RS and EPS settings to achieve the number. We now create three lists. Each list signifies a score for the individual stock. The scoring process uses the Price, Volume and Accumulation / Distribution Is the Accumulation/Distrubtion a reflection of the Volume changes? relationship. Jack Hershey uses a binary scoring system. The stocktables.com web site version of Jackâs Methods creates three lists already scored â zeroâs, oneâs, and sevenâs.
The First list of 10 stocks comes from the bottom of the list working your way up, filtering out stocks with Volume < 200,000.
Ok, so we're looking for stocks that have dropped significantly in volume, makes sense
The Second list of ten stocks comes from the top and working down, selecting only stocks with price gains. So stocks that are climbing with prices climbing... is the logic behind this Jack's determined relationship between price and volume? These stocks have higher volumes and higher prices.
The Third list of 10 stocks comes from the middle of the stocktables.com chart where the volume change is zero. Take five stocks above and five below the middle zero selecting stocks that have greater than 200,000 volumes. What's the significance that the stocks have little volume change, but have over 200k volume? Why are we including these in our list of 30... the first 20 make more sense ATM.
The short list from the bottom I entered as portfolio "1's". The short list from the top I entered as portfolio "7's".
1's are the bottom ones. The top ones are 7's. The middle ones are 0's
Then rank all thirty of the above stocks (three lists of ten) using:
http://www.wealth-lab.com/cgi-bin/W...system?id=32994
Stocks that return no rank are given a rank of zero. Keep all the stocks that have a rank (other than zero), and sort them from highest to lowest rank.
You will then have created your top 10 "Hotlist"
Then you must: Eliminate any stocks that do NOT:
1. Have a float less than 60,000,000
2. Have a float greater than 5,000,000
3. Have a 65-day average volume above 200,000 shares
4. Have positive EPS.
So we're keeping stocks that are fairly solid financially, and from what I read on the float constraints, we don't want stocks that are highly volatile and easily thrown around by volume, nor do we want stocks with too high floats that won't move on volume... correct? The 65day avg volume above 200k probably indicates the the DU of the stock will be above 200k, so the stocks below 200k have easier chances of increasing to hit the DU (I believe these are the 1s)...
****************************************************
Quote from Absolute:
Thanks a lot for the help Spyder
Everything makes a lot more sense
Glad to help, and enjoy the journey as you learn.
- Spydertrader
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