Spydertrader's Jack Hershey Equities Journal II

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First post -- been plowing through this and the other journal lately and I'd just like to say keep up the great work spyder!

I see that none of you were watching LMS. I had it on my watch list after doing some "bulking" in clearstation and noticing this.
Anyway, it signaled today (lbdu, stoch=92, macdhist=+) and I made my first non-paper trade, getting a fill at 30.38. Since none of you mentioned it, I was just wondering if I broke any of the system's rules in making this trade?

Thanks for all you've done so far spyder, as well as all of the other contributors to this thread! :cool:
 
What was your dry-up level for LMS?
Quote from Pr0crast:

First post -- been plowing through this and the other journal lately and I'd just like to say keep up the great work spyder!

I see that none of you were watching LMS. I had it on my watch list after doing some "bulking" in clearstation and noticing this.
Anyway, it signaled today (lbdu, stoch=92, macdhist=+) and I made my first non-paper trade, getting a fill at 30.38. Since none of you mentioned it, I was just wondering if I broke any of the system's rules in making this trade?

Thanks for all you've done so far spyder, as well as all of the other contributors to this thread! :cool:
More...
 
It wasn't IN dry-up persay, I had just noticed that it had passed FRV the previous day and was being pushed towards the right channel by some resistance... So my plan was to buy if the signals lined up today when lbdu was breached, and they seemed to be, so I pulled the trigger.

lbdu: 40 avgdu: 80 frv: 239
 
Quote from Pr0crast:

Since none of you mentioned it, I was just wondering if I broke any of the system's rules in making this trade?
More...

Excellent trade. You definitely followed the spirit of the fundamentals behind the methodology by entering into a long position with LMS. Taking a step back from the details of the method allows one to visualize the 'big picture' with respect to how trading Hershey Equities should work. Eyeballing bulked charts through clearstation always worked for Jack, and with LMS, it appears to have worked for you as well.

Keep up the great work.

- Spydertrader
 
After watching the price improve with respect to HANS I set a trailing stop to make sure i got at least a wash. Ended getting stopped out with a little over 1% profit around 3 today.

gooch87
 
I've also noticed that a stock may be in "Dry-Up" (via any calculations) and then the volume increases just enough to take it out of "Dry-Up" but is still well down on FRV and/or the 65 Day Average.

It may be 2 - 3 days of this and then the stock takes off. LMS was a clear example of this.

An extension of the methodology may be to keep an eye on stocks that have just exited dry-up but the volume hasn't really gone anywhere.

Having said that, it is all too easy to 'tinker' with the methodology to try and catch all possibilities.

You quickly then wind up with something that bears little resemblance to the original methodology. Bit like a trading version of chinese whispers.
 
quote from mischief:

I've also noticed that a stock may be in "Dry-Up" (via any calculations) and then the volume increases just enough to take it out of "Dry-Up" but is still well down on FRV and/or the 65 Day Average.

It may be 2 - 3 days of this and then the stock takes off. LMS was a clear example of this.

An extension of the methodology may be to keep an eye on stocks that have just exited dry-up but the volume hasn't really gone anywhere.
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I noticed this same behavior during papertrading and I instituted a rule that gives the stock a couple of days to reach FRV providing 1) Price continues to improve and 2) volume continues to increase. In my papertrading this rule has allowed several stocks to finish bottoming and breakout in earnest for very good gains. If the stock doesn't reach FRV after day 2 then I sell it at the close or pro-rata when I recognize that it has no shot of making FRV on the sell day.

I think the only way this goes against Jack's concept is that it doesn't maximize "money velocity". Jack likes to turn over money quickly in several "money streams" to maximize profits. This holds a stock for a couple of days when it may not be doing too much to maximize your money velocity.

Personally, I think the hold if it did nothing wrong idea to wait for FRV seems to work better than arbitrarily selling near the close because the stock didn't make FRV. Like the DU level FRV is sort of a blurry calculation, so IMHO the spirit of the method is to look for improving volume with price improvement. If that doesn't happen then the PV relation says that a change in price direction should follow a change in volume direction, hence the logic behind the "hold for FRV" rule. Take a look at a few of these and you'll see many that tend to work. You can always protect yourself with a price stop if you are concerned.

One other thing that I've seen is that a stock may exceed calc'd DU at the bottom of a cycle, but not make FRV. It won't be on your hotlist the next day unless you're eyeballing the DU.

Just some things to consider from my observations...

-ace
 
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