Quote from paultx:
I wonder if the volume discrepancies are the result of an overnight session being included in the data I was looking at and not included in your data.
This very well could be the reason for the discrepancies. Normally, both Scottrade and Qcharts include pre-open trades in their numbers. However, I have no trades for SPTN prior to 9:30 AM in this particular case.
Quote from paultx:
I don't know a lot about overnight trading of stocks. I see references to it but know nothing of the details. 20,000 shares still seems like too much for this particular stock, even if it did trade overnight. There was no major after-market news attached to it that I could see.
A couple of months ago, we discussed how the changes in market hours might affect our trading using Jack's Methods. An earlier 'open' might skew the data requiring us to use an earlier 'cutoff' for actual volume exceeding calculated Dry Up Volume. We will need to continue to monitor this situation to determine if a need to alter our methods exists.
Quote from paultx:
I have an idea regarding the difference in indicators. When looking at the MACD and Stochastic, to determine if a buy signal exists, what period chart do you use? Indicators look totally different if looking at daily, 10 min., 30 min. or whatever, which I'm sure you know.
I monitor the stocks using a 30 minute chart. The chart for SPTN I posted above also uses the 30 minute fractal. The charts I post with my lists each day use the daily timeframe. I use the daily charts each night, and I monitor using the 30 minute charts during the day.
Quote from paultx:
You wrote that the Average should be used as confirmation, if the low band is used as the trigger. Is this confirmation limited to calculating FRV from Average for the EOD confirmation?
I have yet to thoroughly test all the various possibilities. The development of the "DU Volume Range" used in Version Two of my "Hershey Chartscript," resulted from the theory that (with respect to DU Volume calculation) we may be attempting to quantify that which remains unquantifiable. Since Jack (and others) use an 'eyeball' method for determining when a stocks finds itself "in dry up," I developed a theory that Dry Up might actually be a range of numbers rather than one number. Since a stock has a different Dry Up Volume for each cycle, I felt the theory had some validity. In addition, I hoped to develop a method that would encompass the various methods for Dry Up Volume calculation (Dry Up Cycle, Du5, Du10 etc.) into one. The High and Low bands for the range resulted from an attempt to capture a certain number of standard deviations from the mean. In other words, we use probability and statistics to capture the majority of the data. We currently use 1.5 standard deviations (std). Others currently test 2 or 3 std for their calculations. The greater the number of standard deviations used increases the amount of data capture, but it also increases the number of false signals. As a result, I suggested using various levels for confirmation in the same manner one would use FRV levels by EOD or actual volume reaching Dry Up Levels by 11:30 AM, if one entered with pro-rata volume at 10:30 AM. Currently, I cannot provide a methodology that accurately captures the majority of trade signals, while at the same time, provides the fewest false signals. I encourage you to test various uses in order to determine how to best optimize the tools available. As more individuals test and evaluate various aspects of the Chartscript, their input should provide a clear roadmap for how to proceed in the future. For now, (and to answer your question) I believe we are limited only by the scope of our imagination. As a result, I encourage you to test various calculations and entry and confirmation points to determine which best suites your trading style and risk tolerance.
Quote from paultx:
Thank you for your help and patience.
Thank-you for your continued contributions to the Journal, and I hope you find the above information helpful.
- Spydertrader
