Spydertrader's Jack Hershey Equities Journal II

[virgintrader]

Quote from Spydertrader:

Depending on where you find yourself among the many pages of Journals One and Two, you may still have some confusion regarding how the Hershey Equities System operates.

Spyder...
As always, your kindness is appreciated. And you are right, I'm still confused and the lightbulb hasn't fully lit up!

How did you make the transition from working full time to commiting to trade these set ups? Im interested in your journey if you don't mind sharing.

My Dry UPS for tomorrow are: ASPV IIG and TASR. I haven't taken any trades since my ATHR adventure!

So If Im on track, I would enter a trade with ASPV if it exceeds DU of 126K by 10:30 and the MACD >0 and Stoch>80 on the 30 min charts. I would keep this if it reaches FRV of 379K by EOD. Else, Im outta there!

TY

 

[Mercury77]

Can anybody help me with where I can find the information on how to interpretate the unusual volume correlation table and how I can use it in the Hershey strategy? Thanks in advance!

 

[saria]

Hi all,
I've been following this thread for some time now and Spyder, I would like thank you sharing all of this with us newbies. Just some of the concepts alone are gold, let alone having a journal that shows us how to actually execute this strategy.
Only if all the ET forums were like this, we'd all be running hedge funds within a couple of years


I do have a question though. I've been reading through the Chartscripts and it mentions that the lower and upper band DU are 1.5 std deviations away from the Avg DU.
<BR>
The lines below are from "Hershey Equities Rank v. 3.0.0" (line 182)
<BR>
<B>
DUBand := AVERAGEDU*(4986/10000);
DUHigh := AverageDU + DUBand;
DULow := AverageDU - DUBand;
</B>
<BR>
So my question is this. Are the above lines not calculating the DUBand as 49.86% of Avg DU? Unless I'm missing where the std dev is calculated? or is the ChartScript Description out of sync with the code and the formula really supposed to reflect: <BR>
upper band = ~1.5 Avg DU <BR>
lower band = ~0.5 AvgDU
<BR>

thanks again for the journal.

saria

 

[Spydertrader]

Quote from virgintrader:

How did you make the transition from working full time to commiting to trade these set ups?

Before I stumbled onto Jack's methods, I traded full-time using an ETF Trading Method (QQQ, DIA, SPY). Although profitable, I didn't have a large enough account to pay my bills and continue to grow the trading account. Around the same time, I stumbled onto Jack's old posts on USENET, and then found Jack posting on ET. I began to study his old (and at the time, current posts) in an effort to learn the system as best as possible. When Jack received his ban from ET, a few of us formed the MSN web site linked from Journal One. I continued to test and papertrade while I learned everything I could, but decided I still needed to start with a larger trading account.

As a result, I made a decision to return to work for one year in an effort to increase my trading account size. During the time I worked, I traded the methods part time, using a variety of tools to help me enter and exit trades. I enabled Quotetracker to email my mobile phone on volume and price alerts, and made many trades by phoning my broker. I also set quite a few 'bracket' trades to enter either long or short based on market direction.

After a year, the combination of adding cash and profitable part time trading increased my account size to a level I felt necessary to insure lifestyle maintenance and grow the trading account. I then left work for the second time 2 years ago and have never looked back.

Three years ago, while testing out the 'paltalk' Software, I happened to enter the Hershey Trading Paltalk Room. Another individual happened to test that same evening as myself - none other than Jack Hershey. We spoke for nearly 45 minutes regarding his vision for the future and how people with wealth could do 'good things' for society. Jack only requested two things of me in exchange for his knowledge. The first, no profits from the sale of the information or software developed to trade his system. 'No Proprietary Stuff!' Jack insisted the knowledge needed transferred free of charge. Second, I had to promise to 'Pay Forward' to others, that which, he had passed onto me.

The physical manifestation of my promise to Jack resides within the two Journals on ET. Hopefully, many continue to find the information contained within the many pages helpful.

- Spydertrader

 

[Spydertrader]

Quote from Mercury77:

Can anybody help me with where I can find the information on how to interpretate the unusual volume correlation table and how I can use it in the Hershey strategy? Thanks in advance!

Currently, when I use Unusual Volume for an entry, I focus on the middle column of the UV Spread Sheet (FRV). Take your list of Dry Up stocks and sort for unusual Volume (percent volume in Quotetracker). When a dry up stock reaches .22 on the unusual volume sheet prior to 11:00 AM (with price improvement, positive MACD Histogram and Stochastics (14,1,3) above 80) you have a signal to go long. Continue to monitor to make sure Unusual Volume remains above the threshold levels for each time period on the sheet and that the volume bars appear similar to the layout on the bottom of the sheet. You should then see actual volume exceed FRV levels by end of day. After Day one, monitor for Peak volume levels in the Spread Sheet column three. I have not yet used the Peak Volume levels in my own trading.

I hope that helps.

- Spydertrader

 

[Mercury77]

Quote from Spydertrader:

Currently, when I use Unusual Volume for an entry, I focus on the middle column of the UV Spread Sheet (FRV). Take your list of Dry Up stocks and sort for unusual Volume (percent volume in Quotetracker). When a dry up stock reaches .22 on the unusual volume sheet prior to 11:00 AM (with price improvement, positive MACD Histogram and Stochastics (14,1,3) above 80) you have a signal to go long. Continue to monitor to make sure Unusual Volume remains above the threshold levels for each time period on the sheet and that the volume bars appear similar to the layout on the bottom of the sheet. You should then see actual volume exceed FRV levels by end of day. After Day one, monitor for Peak volume levels in the Spread Sheet column three. I have not yet used the Peak Volume levels in my own trading.

I hope that helps.

- Spydertrader

Thanks Spyder that helped a lot! So if I understood you correctly you use this for stocks in dry up and not for the Bruno R set up? I am watching the video and the Bruno R set up is much easier to understand after watching the video. These videos are really great stuff!

 

[stevegee58]

Quote from Spydertrader:

Before I stumbled onto Jack's methods, I traded full-time using an ETF Trading Method (QQQ, DIA, SPY).

Hey spyder, can you provide any further information on this method. I'm always looking for ways to diversify my methods.

 

[Spydertrader]

Quote from saria:

So my question is this. Are the above lines not calculating the DUBand as 49.86% of Avg DU? Unless I'm missing where the std dev is calculated?

When calculating Average Dry Up, we arrive at a single number. However, since we now operate under the assumption that Dry Up Volume does not occupy a single number, but an actual range of numbers, we needed a way to capture all of the numbers in the range. Statistics provided us with an answer. If you look at a normal bell distribution curve, you can see the highlighted (color) areas under the curve marking one, two and three standard deviations from the mean. From a statistics textbook, we know using the 0.4986 multiplier against a mean, then adding (and subtracting) the result to an average, yields the standard deviation (both to the plus and minus side) that we need to capture the vast majority of the data underneath the bell curve.

We use the high end of the Bell Curve (right side) as our minimum requirement for placing a stock onto a 'Dry Up' List (High band DU). As a result, we have a 95% confidence that we have captured all stocks 'In Dry Up' without missing any. We use the lower end of the Bell Curve (left side) as our entry trigger (Low Band DU) providing a 95% confidence level that we captured all the possible entry signals based on our methods - again, without missing any.

In addition, using the range of values for Dry Up Volume calculations yields a method which greatly approximates Jack's 'eyeballing' results for Dry Up Volume calculation. After all, when Jack ' eyeballs' volume, he doesn't say, "OK, DU is 283,759." He says, "DU volume levels are about 280,000." Using statistics to capture the range of values simply brings us closer to the way Jack does things.

I hope that helps.

- Spydertrader

 

[Spydertrader]

Quote from Mercury77:

Thanks Spyder that helped a lot! So if I understood you correctly you use this for stocks in dry up and not for the Bruno R set up? I am watching the video and the Bruno R set up is much easier to understand after watching the video. These videos are really great stuff!

Correct. I use the UV Sheet with DU stocks. I have not tested the UV Spread Sheet against a Watch List of stocks containing 'Bruno R' set ups. It might work. I simply haven't had the opportunity to evaluate the methodology yet.

Quote from stevegee58:

Hey spyder, can you provide any further information on this method. I'm always looking for ways to diversify my methods.

The method works with Futures Contracts as well (ES, Russell, YM & NQ), but I haven't traded the method (only backtested) with the futures. If you search SVRZ's posts, (I think I responded to his inquiry on the subject back in Journal One) you might find some additional information on the methods I used back in the day.

- Spydertrader

 

[cnms2]

Congrats! & Thanks!

Quote from Spydertrader:

Before I stumbled onto Jack's methods, ...

... The first, no profits from the sale of the information or software developed to trade his system. 'No Proprietary Stuff!' Jack insisted the knowledge needed transferred free of charge. Second, I had to promise to 'Pay Forward' to others, that which, he had passed onto me.

The physical manifestation of my promise to Jack resides within the two Journals on ET. Hopefully, many continue to find the information contained within the many pages helpful.

- Spydertrader