Spydertrader's Jack Hershey Equities Journal II

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Simulator Trade

In addition to several other tests, I monitored the following list of Dry Up Stocks today:

ASPV BTUI COGO DXPE GIGM IIG RACK SFCC

Actual Volume of BTUI exceeded calculated Low Band Dry Up Volume (LBDU) at 10:30 AM Eastern Time. Price at that time held at $14.46 and both MACD Histogram and Stochastics (14,1,3) fell within desired parameters (Positive and above 80 respectively). As a result, we had a signal to go long at the $14.46 USD price point. However, actual volume for BTUI failed to exceed Average Dry Up Volume (ADU) by 11:30 AM Eastern Time. According to the methods outlined by 8888broc, we then had a signal to sell. Price at 11:30 AM held at the $14.48 USD price point. The one hour and ten minute long trade resulted in a wash.

Test Trade One of 8888broc's Methods: Wash

- Spydertrader
 
Quote from chapper:

Nice call adding CYBS to the Final Universe, it has moved up nicely on really large volume. Anyone take a trade on this?
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If anyone watched Unusual Volume today, CYBS signaled this morning at 10:35 AM Eastern Time. At that time, price held at the $11.90 USD price point.

- Spydertrader
 
Work is slow today. I am able to generate quality graphics intraday. According to Wealthlab data BTUI generated a long signal at 1030 and there was not enough follow on volume to stay in trade at 1130. See attached image for wealthlab chartscreen.
 

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Spydertrader if I am correct you used pro rata volume of the dry up first. Where did you find the statistical volume distribution per half hour so you could count this pro rata dry up volume forwards? I hope you understand what I mean:) !

BTW I entered my first hershey trade in BTUI and exited below yesterdays close for a small loss:) .
 
Quote from Mercury77:

Spydertrader if I am correct you used pro rata volume of the dry up first. Where did you find the statistical volume distribution per half hour so you could count this pro rata dry up volume forwards? I hope you understand what I mean:) !
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When I used Pro-rata Volume for an entry in Journal One, I marked the half hour intervals and used a percentage of the Average Dry Up Volume by 11:30 AM. For example:

25% Pro-rata Volume = .25 * Average Dry Up - before 10:00 AM
50% Pro-rata Volume = .50 * Average Dry Up - before 10:30 AM
75% Pro-rata Volume = .75 * Average Dry Up - before 11:00 AM

I haven't used 'pro-rata' volume for equities entry in quite some time.

Quote from Mercury77:

BTW I entered my first hershey trade in BTUI and exited below yesterdays close for a small loss:) .
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Congrats on making your first trade. Although your first trade didn't turn out a winner, I hope you continue to keep the rest of us posted on your progress.

- Spydertrader
 
With every "system" you trade you will have losers so thats just the cost of doing business . I just have to find my daily routine with this strategy

What I meant about the pro rata volume is where did this statitistic come from that for example when 25% of du volume was reached before 10 am that you could expect that FRV was reached by the end of the day? Is there any statistical evidence that for a stocks total volume of the day 15% is traded between 9.30 and 10.00 and 10% is traded between 10.00 and 10.30 (the 10% and 15% are just numbers I chose) so the total volume between 9.30 an 10.30 is 25% of the days total volume? The reason I ask this is because I want to do some tests with unusual volume and I need this statistics so I can compare volumes for certain times of the day to see if it is unusual. I hope you understand what I am talking about because this is very complex for me to explain in English:) .
 
Quote from Mercury77:

With every "system" you trade you will have losers so thats just the cost of doing business . I just have to find my daily routine with this strategy

What I meant about the pro rata volume is where did this statitistic come from that for example when 25% of du volume was reached before 10 am that you could expect that FRV was reached by the end of the day?
More...

The system itself uses Dry Up Volume reached by 11:30 AM Eastern Time as a form of Pro-Rata FRV. Remember, we want to enter into a long position in a stock as it breaks out in both volume and price. FRV indicates such an environment. However, if we wait until an equity has reached FRV levels, we miss a significant portion of the initial price move. As a result, we enter when actual volume has reached Dry Up Volume levels early in the day.

Pro-Rata Volume simply moves the entry threshold back earlier in the morning in an effort to capture an even larger portion of the initial price move. In Journal One, my own experience indicated using 50% Pro-Rata Volume before 10:30 AM Eastern time provided the best balance between quality signals and False Break Out (FBO). I experienced increased numbers of FBO's using 25% Pro-rata Volume, and while I experienced fewer FBO's, I also gave up significantly greater profits by waiting until 75% Pro-rata Volume.

By dividing the first two hours of the trading day into 30 minute increments, we can easily apply Pro-Rata volume to time in quarter segments. It really isn't any more complicated than that.

Don Cameron did post a breakdown of overall volume by time based on market analysis in the older MSN web site. I do not recall the exact details as to where he obtained the information, but I saved the breakdown by time and percentage of the daily volume traded at that time.

10:30 a.m. 0.25
11:15 a.m. 0.33
12:15 p.m. 0.5
1:15 p.m. 0.6
2:15 p.m 0.7
3:15 p.m. 0.9

I hope you find the above explanation helpful.

- Spydertrader
 
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