Spydertrader's Jack Hershey Equities Journal II

[Spydertrader]

Quote from foible:

I report the %D line (Green Line in Quotetracker).

The above line I posted in error and corrected in a post several months later. I watch the %K line. The Green line (Default color settings in Quotetracker) is the %K and not the %D line. I apologize for any confusion created by my typo.

- Spydertrader

 

[gpzany]

Quote from foible:

My first try at a Hershy trade: long CKCM at 19.74 for 100 shares. Volume exceeded LBDU, and on the 30 min chart, the MACD was positive (though converging), stochastics were 82, no gap up, and no single large trade.

I draw the trend lines and it seems close to the top. The big move off the opening, up .80 makes me question how much more steam this stock has left in it.

But what do I know? I'll follow the rules and see where this goes...

Hi foible,

CKCM triggered for me at 10:51 at 19.69 with a MACD = 0.179, Stoch = 62.11, LBDU trigger of 97495

I did not take this trade due to the stoch not being above 80 and also Qcharts had reported 1 block trade of 14000 shares, which is approx 14% of LBDU.

 

[mattjbarlow]

Well I'm embarrassed to say I made a mistake this morning and purchased CNTF even though the Stochastics were only at 70. It was an error on my part. It looks like they are turning up now so I will just play it out and hope for the best.

 

[gooch87]

I closed the remaining 60 shares when price crossed the lower channel for a wash on those shares. So I had a total 2.3% profit.

I entered COGO this morning 100X14.15 and sold a few minutes later, 100X14.71 for a quick 2%.

I entered TSFM 100X8.90 this was a premature trade. It may need another day to cure.

Have a good weekend everyone.
gooch87

 

[foible]

Quote from gpzany:

I did not take this trade due to the stoch not being above 80 and also Qcharts had reported 1 block trade of 14000 shares, which is approx 14% of LBDU.

It looks like in my keenness, I mis-read the stochastics. They're very much turned around by now, and I just got stopped out for a 2% loss with narry a twich in my direction.

I did see the 14000 block trade, but as it was on the open (not uncommon to see a large consolidated print) and the volume increased steadily throughout the morning with several trades above 3000, I put this aside.


Does anyone else think that this large block trade should have been a bigger concern? What about the large run-up in the first hour of trading (over .80!)?

 

[gpzany]

Quote from foible:

It looks like in my keenness, I mis-read the stochastics. They're very much turned around by now, and I just got stopped out for a 2% loss with narry a twich in my direction.

I did see the 14000 block trade, but as it was on the open (not uncommon to see a large consolidated print) and the volume increased steadily throughout the morning with several trades above 3000, I put this aside.


Does anyone else think that this large block trade should have been a bigger concern? What about the large run-up in the first hour of trading (over .80!)?

The reason I don't enter these trades is that the large block trades can skew the entry signal by triggerring a barage of buying by traders who want to ride the coattales of this trade, if the bids keep moving higher. Then suddenly the buying dries up and the stock reverses and sells off....

just my 2 cents worth...

 

[Spydertrader]

Quote from foible:

Does anyone else think that this large block trade should have been a bigger concern? What about the large run-up in the first hour of trading (over .80!)?

After going back and reviewing the T & S for CKCM, I found the following block trade (attached). It appears your interpretation of the opening print resulted from a large pre-market trade, and not multiple orders at the open.

- Spydertrader

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1077278>

 

[vladt]

Quote from foible:

It looks like in my keenness, I mis-read the stochastics. They're very much turned around by now, and I just got stopped out for a 2% loss with narry a twich in my direction.

I did see the 14000 block trade, but as it was on the open (not uncommon to see a large consolidated print) and the volume increased steadily throughout the morning with several trades above 3000, I put this aside.


Does anyone else think that this large block trade should have been a bigger concern? What about the large run-up in the first hour of trading (over .80!)?

Hi, Can you please clarify which stoch. (14,1,3) do you use slow or fast?
I use QuoteTracker and slow stoch at that time was around 60-65 and fast -82. On previous post Spydertrader said
he use slow stoch.
I have attached the CKCM chart.

Thanks.

 

[foible]

Quote from vladt:

Hi, Can you please clarify which stoch. (14,1,3) do you use slow or fast?
I use QuoteTracker and slow stoch at that time was around 60-65 and fast -82. On previous post Spydertrader said
he use slow stoch.

I'm using CyberTrader as a platform, and frustratingly, they don't support the full stochastic oscillator, so I've tried to rig my own from the %K and %D directly.

For %K, I have a period of 14, and a slowing factor of 1. For %D I have a period1 of 14, period2 of 3, and a slowing factor of 1. This was an attempt to construct the Stoch(14,1,3). It is my understanding that the fast/slow difference refers to the slowing factor, which is the '1' in the full stochastic, so in this case, it would be a fast stochastic.

When talking about a full stochastic, I haven't been able to find any documentation which refers to a slow or fast stochastic. Rather, it seems like you can emulate the slow or fast by varying the slowing factor (see the quote below).

After watching Jack's videos, he says some things which confuse me a bit. He refers to the (14,1,3) stochastic as "slow", and the (5,2,3) or (5,3,3) as the "fast", even though it has a greater slowing factor and the online docs would call this a "slow stochastic".

I might be way off base here, but I understood this to mean that, even though it is using a slow stochastic calculation, the period over which the calculation is performed is much smaller (5-period MA vs 14) and so it will respond much faster.

What is your understanding?

stockcharts.com
The Full Stochastic Oscillator takes three parameters. Just as in the Fast and Slow versions, the first parameter is the number of periods used to create the initial %K line and the last parameter is the number of periods used to create the %D (full) signal line. What's new is the additional parameter, the one in the middle. It is a "smoothing factor" for the initial %K line. The %K (full) line that gets plotted is a n-period SMA of the initial %K line (where n is equal to the middle parameter).

The Full Stochastic Oscillator is more advanced and more flexible than it's Fast and Slow cousins. You can even use it to duplicate the other versions. For example, a (14, 3) Fast Stochastic is equivalent to a (14, 1, 3) Full Stochastic and a (12, 2) Slow Stochastic is equal to a (12, 3, 2) Full Stochastic.

I should add that I made a mistake in my entry, and entered on the %D being >80, and not the %K as I should have. When I examine my notes on my entry & exit rules, I see that I had written that down, but didn't pay close enough attention when placing the trade.

 

[foible]

Quote from vladt:

On previous post Spydertrader said
he use slow stoch.
I have attached the CKCM chart.

Thanks.

Eyeballing your chart, your fast stoch looks a lot closer to the stoch that I used for entry. Thanks for the chart - I'll have to do some more tweaking.