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Spydertrader's Jack Hershey Equities Journal
- Thread starter Spydertrader
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At 11:00 AM, we received a signal to go long HANS as dry up volume had been reached. We see price improvement as well. MACD was well into the positive range, and The Stochastic Indicator confirmed the trend. (MACD: .015, Stoch 80.14).
As a result, we entered a buy order (Jack Hershey advises using market orders, but I used a limit order) 400 shares at $25.10.
- Spydertrader
As a result, we entered a buy order (Jack Hershey advises using market orders, but I used a limit order) 400 shares at $25.10.
- Spydertrader
Proper money management technique remains equally important to using a trading system (or set of rules) with a positive expectancy. The following link directs you to an extremely well written document in which the author discusses all aspects of proper money management. I strongly recommend reviewing the web site below.
http://members/tips/money
The preservation of trading capital MUST be the top priority of every trader. Loss of capital eliminates the possibility of trading in the future. As a result, the use of risk reduction techniques prevents 'account blow out' on any one trade. Every trader, regardless of trade vehicle, will experience a loss at some time or another. Insuring that the inevitable loss totals a small percentage of one's trading account requires proper position size.
For the purposes of trading the Jack Hershey equities Method, I use a portion of my total trading account. I risk no more than 1% of my equity on any one trade. This means that if my stop loss is reached (defined as a 5% loss), the total dollar amount of that loss will be 1% of my equity. Since the capital used to trade the Hershey Method is $50,000 USD, the 1% loss would be $500.00 USD. As a result, the position size required to meet my predetermined risk level and target prices (below) is calculated at 400 shares.
HANS
Buy Price: $25.10
Initial Stop: $23.85
Target: $27.60
Maximum shares: 400
Although the odds of an outcome of 'heads' occurring on any one flip of a coin is 50/50, we understand that it is possible, for ten flips in a row, the result could be 'tails.' As the number of 'flips' increases, the results more closely resemble the expected odds. In Vegas, the house has the edge the longer you gamble for this very same reason. Traders need to protect themselves from such similar anomalies by using position sizing and overall risk management. In order to experience 'account blow out' using these position size techniques, I would need to experience nearly 100 losing trades in a row (simplified to include commission) before my account balance would reach zero dollars. This is a highly unlikely event based on my experience thus far. Still protecting against 'risk of ruin' requires consideration and implementation of proper technique.
Your level of risk should depend on your style of trading and level of risk aversion. Smaller accounts may wish to risk a greater percentage of their portfolio, while larger accounts may wish to risk less. Increased risk often presents an opportunity for increased levels of reward, but it also represents increased risk of ruin. Finding the correct balance for your psychological profile and trading methods should be a major focus of your efforts in addition to learning these trading methods discussed in this journal thread.
I hope you find the above information useful.
- Spydertrader
http://members/tips/money
The preservation of trading capital MUST be the top priority of every trader. Loss of capital eliminates the possibility of trading in the future. As a result, the use of risk reduction techniques prevents 'account blow out' on any one trade. Every trader, regardless of trade vehicle, will experience a loss at some time or another. Insuring that the inevitable loss totals a small percentage of one's trading account requires proper position size.
For the purposes of trading the Jack Hershey equities Method, I use a portion of my total trading account. I risk no more than 1% of my equity on any one trade. This means that if my stop loss is reached (defined as a 5% loss), the total dollar amount of that loss will be 1% of my equity. Since the capital used to trade the Hershey Method is $50,000 USD, the 1% loss would be $500.00 USD. As a result, the position size required to meet my predetermined risk level and target prices (below) is calculated at 400 shares.
HANS
Buy Price: $25.10
Initial Stop: $23.85
Target: $27.60
Maximum shares: 400
Although the odds of an outcome of 'heads' occurring on any one flip of a coin is 50/50, we understand that it is possible, for ten flips in a row, the result could be 'tails.' As the number of 'flips' increases, the results more closely resemble the expected odds. In Vegas, the house has the edge the longer you gamble for this very same reason. Traders need to protect themselves from such similar anomalies by using position sizing and overall risk management. In order to experience 'account blow out' using these position size techniques, I would need to experience nearly 100 losing trades in a row (simplified to include commission) before my account balance would reach zero dollars. This is a highly unlikely event based on my experience thus far. Still protecting against 'risk of ruin' requires consideration and implementation of proper technique.
Your level of risk should depend on your style of trading and level of risk aversion. Smaller accounts may wish to risk a greater percentage of their portfolio, while larger accounts may wish to risk less. Increased risk often presents an opportunity for increased levels of reward, but it also represents increased risk of ruin. Finding the correct balance for your psychological profile and trading methods should be a major focus of your efforts in addition to learning these trading methods discussed in this journal thread.
I hope you find the above information useful.
- Spydertrader
Quote from makosgu:
Feedback on this function would be great, so that I can know whether or not the above code will work for us....
Regards,
G33M4K
I compared your BoP Formula with warden's BoP formula over several charts of various stocks using different time frames. The lines look identical to me. If a difference exists between your formula and that of warden's Balance of Power, I don't see it.
Excellent job!
- Spydertrader
Quote from Spydertrader:
I compared your BoP Formula with ...
Excellent job!
- Spydertrader
Yikes!!! I was hoping that there would be at least some difference in value, but same value in sign (ie. + vs -), since all we are really interested in is whether there are more buyers than sellers in the market. I may need to hold off putting transferring this into excel since I had no intentions for it to be exact. I would think that the desired calculation would have required some subtle complexities. Since we are not concerned with the strength of this indicator, that I will name as A/D, I will simplify and only use direction in order to reduce it to Jack's binary orientation. A final form will most likely yield -1 (indicating dist) or +1 (indicating acc).
On a second note, after googling around, I didn't see anything mentioning that the BOP in WSA is in fact Worden's indicator... Can anybody verify this?
Newbs, look for version v0.15 of the spread sheet to roll out soon.
G33M4K
Keeping it Movin!
I know you true JH guys don't believe in MA as an indicator, but here is a view of what happened with HANS today (this is a daily chart with a 20-Day Simple MA).
It pulled back to resistance from the 20DMA. Good news is it closed on it, so if it opens in the same area there is a good chance of making a run and taking out today's high.
If this is too much OT, I apologize. Old habits die hard.
It pulled back to resistance from the 20DMA. Good news is it closed on it, so if it opens in the same area there is a good chance of making a run and taking out today's high.
If this is too much OT, I apologize. Old habits die hard.
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