Spydertrader's Jack Hershey Equities Journal II

[stevegee58]

Quote from stevegee58:

I'm in TSCM at 27.50 and PWEI at 11.04

Best signals in weeks. I agree about concern with the block trades, but nonetheless there was follow-through in volume.

LOL oops. It's TSCM at 11.04 and PWEI at 27.50. Got 'em switched.

 

[mattjbarlow]

Quote from foible:

Going to keep a close watch on PWEI to see what it does if it approaches 27.75 again.

I was working on my charts and saw the price shoot up to 28.55 for a brief period at 2:15 PM. I thought about closing the trade but decided to stick with my written system. I was wondering if you took advantage of this.

EDIT: It actually made a high of 28.30 not 28.55 as I mistakenly stated.

 

[tradingbug]

Quote from mattjbarlow:

I was working on my charts and saw the price shoot up to 28.55 for a brief period at 2:15 PM. I thought about closing the trade but decided to stick with my written system. I was wondering if you took advantage of this.

Still holding with confidence. Looks flawless to me.

 

[foible]

Quote from mattjbarlow:

I was working on my charts and saw the price shoot up to 28.55 for a brief period at 2:15 PM. I thought about closing the trade but decided to stick with my written system. I was wondering if you took advantage of this.

I watched that. And watched the sickening drop back to .63 without selling. Like you, I'm trying to stick to the written rules. The large volume for the rise makes me hopeful that it'll retest.

Have you been watching TSCM today? It has almost done it's 10% move in one day. Good trade for those who got in!

 

[mattjbarlow]

Quote from foible:


Have you been watching TSCM today?

I hadn't checked it until just now. I agree, congrats to all who profited from this!

 

[Spydertrader]

Great Trading today! I hope everyone enjoyed the many signals generated throughout the day and profited handsomely. I'm carrying a small position on SMDI ($12.00 USD basis) through the weekend and expect it to move higher next week.

Enjoy the long weekend everybody.

- Spydertrader

 

[ikkyu]

Greetings folks,

Yesterday was exciting.

I wonder if those large block trades should be treated suspiciouly or almost as a coat-tail reinforcement for these methods.

Do most people consider LEVEL II data for the volume breakout methods?

I guess that i still only respectfully disagree with most people here in regard to "scaling-out." Van Tharp's discussion of this point seems logically sound and he is strongly against it. He argues that you take losses on the aggregate position, but full profits on only a portion of it. This is the oposite of cutting your losses and letting your profits run. It seems like it would be better to lower the target profit, to say 7%, and take full profit.

Doesn't "scaling-out" reduce your return/risk ratio?

Also, if i have 3 money streams that i am scaling into and out of... that would be like having 6-8 separate positions to keep track of. Not to mention 2* to 3* the commission and slippage.

I am a total freshman, so please convince me otherwise. I would be delighted to see evidence to the contrary.

Thanks for the great ongoing discussion.

Cheers from rainy England,
john

 

[cnms2]

I started to write a reply to your question a couple of times, then I cancelled because I'm confused about what you're trying to trade. Have you read Spydertrader's journals I and II? Do you trade the method he described? If you did, I probably don't understand what you asked. If you didn't, I don't know what you trade.

Quote from foible:


...
Another question about trend lines related to TSCM. On the 30 min chart, TSCM looks to be in a down-sloping channel, and is trading near the top, but on the daily chart, it looks like it has a lot of room to move. The 30 min chart is showing stochastics (%K) at 100 and the MACD histogram is slightly positive. The daily stoch & MACD indicators are showing a good setup for a 'Bruno R' High Noon - declining volume, fast stoch crossing up through 50, slow stoch moving up after a sharp drop, MACD negative but about to cross up into positive.

So, according to the indicators, this looks like a buy, according to the 30 min chart trendlines, this looks like a pass, and the daily chart shows it as a buy.

Do you have any preferred way to deal with conflicting signals?

thanks for your help, all.

 

[Spydertrader]

Quote from ikkyu:

Greetings folks,

Hello, and welcome to the discussion.

Quote from ikkyu:

Yesterday was exciting.

I have no doubt many found relief with the market's return to (somewhat) normalcy - if at least for a day.

Quote from ikkyu:

I wonder if those large block trades should be treated suspiciously or almost as a coat-tail reinforcement for these methods.

I always treat block trades suspiciously. However, one simply needs to scale in with smaller size (and reduce the over all risk) in an effort to avoid experiencing a meltdown similar to JOBS yesterday. (See attached).

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1084857>

Quote from ikkyu:

Do most people consider LEVEL II data for the volume breakout methods?

I watch the Level II Screen during the day, but normally, only after I have a position on. I look for certain signs which (in the past) have often indicated significant movement of price (one way or the other). However, the big boys have plenty of methods they can employ in an effort to disguise (or head fake) their intent. As a result, I use Level II data as a tool to keep myself focused during the day, rather than, as a tool to determine entry or exit.

Quote from ikkyu:

I guess that i still only respectfully disagree with most people here in regard to "scaling-out." Van Tharp's discussion of this point seems logically sound and he is strongly against it. He argues that you take losses on the aggregate position, but full profits on only a portion of it. This is the opposite of cutting your losses and letting your profits run. It seems like it would be better to lower the target profit, to say 7%, and take full profit.

I also scale into a position as recommended in The Futures Magazine article Phantom's Gift. As a result, my losses normally occur with significantly less than a full position on.

In addition, sometimes it simply makes better sense to allow a portion of one's position to run. If you look at a daily chart of TWGP (See attached), you notice price has already broken through the upper trendline of the Intermediate Term Channel. In addition, price finds itself at "All Time High" levels. Now, price (and volume) appear to have topped out. However, one could also make the case (based on Stochastics (14,1,3) movement) that the stock could head much higher - especially since the stock held strong during the market's overall sell off. In this scenario allowing a portion of one's position to remain 'in the market' provides a trader the opportunity to see significant price improvement (should it develop), while at the same time, banking the gains made over the 4 day run (natural cycle).

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=1084858>

Quote from ikkyu:

Doesn't "scaling-out" reduce your return/risk ratio?

When scaling in and out, one needs to remain cognizant of the changing ratio of risk to reward. The same axiom holds true when one chooses to add to a winning trade. Depending on the price levels at which one adds shares, a trader should appropriately adjust their trade expectations, stop price (e.g. break even point), as well as monitor changes in risk / reward ratios.

Quote from ikkyu:

Also, if i have 3 money streams that i am scaling into and out of... that would be like having 6-8 separate positions to keep track of. Not to mention 2* to 3* the commission and slippage.

Each brokerage firm has different rules for handling scaling into and out of a position. Some 'All-in' commission plans do account for 'scaling into and out of' a trade if doing so within a reasonable time frame. If one uses per share pricing, no changes in commissions occurs when compared to placing the entire position on in one lump. Moreover, scaling in often reduces the slippage (in my experience) due to a reduction in the opportunity to 'move the market' when placing a larger bulk order. I have found on occasion an order of 400 shares can move price (depending on the time a trader places the order), but breaking the order into smaller (200 lot) size, avoids the 'market movement' phenomenon.

Quote from ikkyu:

I am a total freshman, so please convince me otherwise. I would be delighted to see evidence to the contrary.

I do not attempt to convince you 'otherwise' with my response to your inquiries. Rather, I recommend (for the time being) you forget what you have learned in the past, and focus on learning the fundamentals of this system. After you have internalized the process, feel free to apply your own past experiences in an effort to compare success rates and provide iterative refinement to the overall methods.

Quote from ikkyu:

Thanks for the great ongoing discussion.

Thanks for your input.

Quote from ikkyu:

Cheers from rainy England,
john

Good Trading to you.

- Spydertrader

 

[Spydertrader]

Attached chart