Spydertrader's Jack Hershey Equities Journal II
- Thread starter Spydertrader
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Hey Payguard, I am in the exact same boat as you. I just got setup on quotetracker about 2 weeks ago, and found it a little difficult at first. What I did was go to the HELP menu and read thru the entire thing as well as test everything to make sure I understood it. If I didn't understand something I just emailed QT support and they returned an email within 10 minutes everytime (excellent customer service). Reading thru the whole help section took some time but it has helped alot, I would recommend doing that first. Also, I have put a bunch of posts about quotetracker from J1 and J2 in a word file. If you want it I can email it over to you. Its basically just a bunch of random things about quotetracker that have been discussed throughout the journals.
Quote from payguard:
Spydertrader et al,
Excellent Journal! I can't get away from it......
I have been reading both the first & current journal and believe I have a good understanding of the JH methods described.
Since I know absolutely nothing about stocks and/or trading, (other than what I've learned in the journals) I was wondering if anyone could please help me with getting quotetracker setup correctly? I am ready to begin paper-trading & have setup a demo acct on MBTrading but am overwhelmed when I try to figure out what to do with quotetracker........there are so many settings!!
Any help would be greatly appreciated!
payguard
Hello!
I've been reading through a big part of the 2 journals and find the presented system hugely interesting.
What I would like to know is how important it really is to watch the stock throughout the opening day.
The problem for me is that I live in Europe and this would mean that I would need to spend most of my nights in front of the computer.
Watching the stock until 11 AM would not be a problem at all but it would be a bit anoying to watch it till closing time every day I do a trade.
In his methodology spydertrader defined the following points for the first day:
.) Exit when a 2% loss in equity price occurs -> OK this can be done with a stop
.) or price heads into the negative (red) for the day (not since entry, but compared to previous day close) -> So this could also be done by placing a stop.
.) At EOD - Exit if volume does not exceed FRV prior to the close -> I'm not sure how to understand that:
I thought you only do a trade if FRV is exceeded?
Can anybody help me out with that?
Do you have a rough idea how most of your trades would have turned out if you would not have monitored the trade throug the day, but just sticked with the 2% stop rule?
What I would also like to know is, how good the system perfoms in rough times like the ones we have right now?
Do you notice a big difference compared to last year or not?
Thank you very much in advance for any information you can provide
Kind regards
Robert
I've been reading through a big part of the 2 journals and find the presented system hugely interesting.
What I would like to know is how important it really is to watch the stock throughout the opening day.
The problem for me is that I live in Europe and this would mean that I would need to spend most of my nights in front of the computer.
Watching the stock until 11 AM would not be a problem at all but it would be a bit anoying to watch it till closing time every day I do a trade.
In his methodology spydertrader defined the following points for the first day:
.) Exit when a 2% loss in equity price occurs -> OK this can be done with a stop
.) or price heads into the negative (red) for the day (not since entry, but compared to previous day close) -> So this could also be done by placing a stop.
.) At EOD - Exit if volume does not exceed FRV prior to the close -> I'm not sure how to understand that:
I thought you only do a trade if FRV is exceeded?
Can anybody help me out with that?
Do you have a rough idea how most of your trades would have turned out if you would not have monitored the trade throug the day, but just sticked with the 2% stop rule?
What I would also like to know is, how good the system perfoms in rough times like the ones we have right now?
Do you notice a big difference compared to last year or not?
Thank you very much in advance for any information you can provide
Kind regards
Robert
We want to buy stocks where we see a volume and price breakout (Actual Volume Exceeding FRV Levels by EOD). However, if you wait until the point in time where volume has exceeded FRV levels, a significant portion of the overall move has passed you buy. In an effort to catch a portion of this profit, we enter into a long position based on DU Volume levels exceeded earlier in the day. While doing so often creates the opportunity for False Breakout (FBO), it also provides the opportunity for increased profits.
As you progress in your review of the two Journals, you will stumble across the Stop Offset Rule. This provides superior results when using a stop for avoidance of a 'worst case scenario.' You could simply hold overnight - exiting the position the next morning at the open - if you find yourself unable to monitor the position throughout the trading day. However, doing so increases the amount of risk involved.
8888broc posted some outstanding results for trades taken during the May - June time frame. Although the overall market corrected downward by 10%, 8888broc showed Hershey System results in the 19% - 21% rate of return area. 8888broc added one small tweak - using Average Dry up Volume calculations as a confirming indicator to remain in the trade by 11:30 AM Eastern Time. Failure of actual volume to exceed Average DU by 11:30 AM resulted in a trade exit.
I hope the above post provided you some additional clarity.
- Spydertrader
Hey Spidertrader!
Thanks a lot for your quick reply.
Ok, so basically, you are closing your position towards the end of the day, when you notice that FRV will not be reached. Right?
I also had a look into the excel sheet you provided containing the trades of your first year (impressive).
What I noticed was, that about 18% of your trades where closed on the opening day and were in the range of 1-7% profit.
Am I right in expection that these trades were closed based on the FRV not being reached by the end of the day?
I will try to start paper trading the system soon, to see how it works for me.
I just want to tell you, that I find your work here absolutely amazing and I really appreciate what you are doing.
Good trading!
RXT
Thanks a lot for your quick reply.
Ok, so basically, you are closing your position towards the end of the day, when you notice that FRV will not be reached. Right?
I also had a look into the excel sheet you provided containing the trades of your first year (impressive
).What I noticed was, that about 18% of your trades where closed on the opening day and were in the range of 1-7% profit.
Am I right in expection that these trades were closed based on the FRV not being reached by the end of the day?
I will try to start paper trading the system soon, to see how it works for me.
I just want to tell you, that I find your work here absolutely amazing and I really appreciate what you are doing.
Good trading!
RXT
Yes. If actual volume does not make calculated FRV levels by EOD, you sell. Do not sell too early though. Many times, a late day surge in volume provides just enough force to move the market in your favor. See Rack today after 2:00 PM Eastern Time.
I closed most of the trades due to the FRV rule. I also opted out of a few trades for a variety of other reasons (Thought I was smarter than the market, lack of discipline, greed, fear, geopolitical risk, etc.)
- Spydertrader
I did a bit of poking about and found something interesting about float and wondered if anyone else had found the same thing, or had any comments to make.
I was re-reading the first Journal and some of the associated links, trying to understand the filtering process and looking for ways to either increase the number of opportunities, and possibly create different groups with different risks. The one thing which came up immediately was the float.
I can understand why we want a minimum float, but I never understood the reason for a maximum. Several people have said that if the float is lower, then the stock moves more rapidly, but to my mind, the scan for 5 increases of 20% in six months tells me all I need to know: the stock has moved in the past, and so it is reasonable to expect it to move in the future. Why would I add an arbitrary cutoff to tell me that the stock can't cycle if the scan is a more reliable indicator?
I can see cases where we have so many signals, we wish to pick only those stocks that move the fastest, but I don't know about others, but I definitely don't have this problem right now. I'm not in any position and didn't get any signals to buy for a few days. A slower moving horse is still faster than no horse.
So I increased the number of stocks to come back from stocktables.com (RS and EPS to 70), and eliminated the check for maximum float and, interestingly, I didn't find any more stocks to add to my final universe!
Maybe this is just a dry spell, but I'm thinking that the max float restriction is actually a weaker way of saying that the stock must cycle. Thanks to Spydertrader's wealth-lab script, we can check very large numbers of stocks quickly and efficiently, so it may be to our advantage to remove the max float check.
I'm going to give it a try for a month and see if I am getting any more signals, and if so, how these higher float stocks compare to the standard Hershey equities.
I was re-reading the first Journal and some of the associated links, trying to understand the filtering process and looking for ways to either increase the number of opportunities, and possibly create different groups with different risks. The one thing which came up immediately was the float.
I can understand why we want a minimum float, but I never understood the reason for a maximum. Several people have said that if the float is lower, then the stock moves more rapidly, but to my mind, the scan for 5 increases of 20% in six months tells me all I need to know: the stock has moved in the past, and so it is reasonable to expect it to move in the future. Why would I add an arbitrary cutoff to tell me that the stock can't cycle if the scan is a more reliable indicator?
I can see cases where we have so many signals, we wish to pick only those stocks that move the fastest, but I don't know about others, but I definitely don't have this problem right now. I'm not in any position and didn't get any signals to buy for a few days. A slower moving horse is still faster than no horse.
So I increased the number of stocks to come back from stocktables.com (RS and EPS to 70), and eliminated the check for maximum float and, interestingly, I didn't find any more stocks to add to my final universe!
Maybe this is just a dry spell, but I'm thinking that the max float restriction is actually a weaker way of saying that the stock must cycle. Thanks to Spydertrader's wealth-lab script, we can check very large numbers of stocks quickly and efficiently, so it may be to our advantage to remove the max float check.
I'm going to give it a try for a month and see if I am getting any more signals, and if so, how these higher float stocks compare to the standard Hershey equities.
I certainly do not wish to discourage your attempts at improving the number of symbols. Rather, I wanted to explain why we have a maximum float level in the culling parameters. As you correctly observed, a lower float creates an environment where a stock price seems to 'come to life' and move rather quickly. However, too low a float creates an environment ripe for price manipulation. We see a similar effect at the other end of the spectrum. Higher floats cause a stock price to move more slowly. However, too high a float creates an environment where price moves very little (or not at all).
The reasons behind the movement (or lack thereof) stems from the fact that lower floats reduces the time needed for all current shareholders to dump their shares. Price increases when few shareholders find themselves willing to sell their shares at the present price level. As a result, we see price rise in an effort to entice shareholders to sell.
With a higher float, we need an ever increasing number of buyers to snap up the available shares in order to get to the point where price needs to rise to entice additional sellers. With too high a float, we rarely (if ever) reach this point, and as a result, rarely see the highly profitable rocket trades.
These dead times happen now and then. When I started the Journal, I had two straight weeks without any trades (hell'uva way to start a Journal). Remaining patient in the face of these current market conditions remains a hallmark of longevity.
If you really want something to do, I recommend researching shorting Hershey Equities. TIE triggered a short signal today (around 10:30 AM Eastern) yielding a small profit of 34 cents per share from time of signal. A few examples of shorting also exist in Journal One. Use the examples (TIE & Journal One) as a starting point. Search Moz's posts for his attachment where he quote's Jack's views on shorting.
Welcome to summertime trading.
- Spydertrader
It's 6-5 and Pick 'em.
Well yes, price does currently sit at the bottom of the IT Channel (Pro), but that channel is headed down (Con). The MACD appears as if it wants to cross over to the upside (Pro), but the Stochastics haven't headed back northward just yet (Con). While price has remained stable and within a tight range (CCC?) over the last few days (Pro), the last time price acted in such a fashion, price headed lower for two days before reversing the trend (Con). Having said all that, CTRN currently sits "In Dry Up" at present, and that earns it a spot on tomorrow's List of Stocks To Watch.
Clink. Clink. Just my 2 cents worth.
- Spydertrader
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