Spydertrader's Jack Hershey Equities Journal

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Quote from nzbryant:

In your results list, it seems you get out of stocks very quickly. Your largest gain is 10%. I know we have a 6-8 day cycle but there are many stocks in Hershey type lists that have gone up 20% in a couple of weeks.
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As you correctly observe, Jack teaches to look for stocks that appreciate by 20% within a period of six months that cycle 5 times minimum over 6 - 8 days. Since Jack operates from a standpoint of excellence, he sets the bar extremely high. I have yet to achieve consistent 20% gains as described in The Jack Hershey Equities Method. Due to market conditions, I routinely watched as the market took back the gains of previous trading days before I could 'bank' the profits leaving me with less than optimal profits. However by reducing the hold time to four days, I have been able to produce consistent 10% gains over the past year. As a result, I altered the holding time thereby providing the opportunity to accrue a greater number of 10% gains. This also had the affect of increasing the number of cycles in which my money would be placed. Jack explains it this way:

Quote from Jack Hershey in "The Big Post I - X":

The formula is: Results = Starting Capital times ( 1 + profit per
cycle)raised to the exponent of the # of cycles.

Plug it into your calculator. Oops. Well thats a problem.

Let me do a few simple examples until you buy a calculator that is oriented to making money.

Lets make 10 % profit on four cycles starting with 300 dollars. results = 300( 1+.10)exp4.

Results = 300 (1.1)(1.1)(1.1)(1.1) = 300 (1.4641) = 439.23. The profit is = 139.23/300 = 46.4 %

The point is: Shorten the time it takes to make the investment cycle. The larger you can make the exponent in a given period, say a year, the more whatever your initial capital is will appreciate.
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For me, waiting to make the additional 10% by holding an extra 2 - 4 days increased the number of losses. Reducing the hold time and setting a target of 10% reduced the profit per trade, but it also increased the number of overall 'winning' trades and significantly lowered the number of losing trades. As the market remains a dynamic entity, I suspect no one method will work all the time.

Quote from nzbryant:

I use a tight trailing stop, as I have found that I used to get out after volume peaks, but then often an immediate second surge would take the stock up another 10%. This still maximizes price appreciation rate.
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I agree your methods do maximize the appreciation rate and help you to achieve the greatest money velocity based on your interpretations of Jack's teachings. Without a doubt, your observations mirror the teachings of Jack Hershey. However, Jack uses a 'stop offset method' for calculating where to place his stops. I use a different target price based on risk reduction. YMMV.

The use of a trailing stop affords one the luxury of improving the risk / reward ratio as the trade begins to move in your favor. Excellent advice you provide here.

I appreciate your contributions to the discussion and encourage you to continue. Feel free to share your methods for creating your version of the Hershey Universe and / or Dry Up Volume calculation. I remain confident that everyone benefits from your input.

- Spydertrader
 
Thanks Spydertrader.

You write thoughts that are well thought out.

There are some spectacular people on Elitetrader - Im sure if many of us met each other we would be surprised how well we get along - intellectual curiosity/decisiveness etc - similar traits.


Regarding dry-up volume - I look at it visually - the market doesnt calculate it, volume is based on beliefs of traders and willingness for them to do an action. If volume has dried up I dont buy - I wait for confirmation, however slight. A tick up from dry-up volume, with a price chart that looks as though it is about to break out (channels, consolidation, stochastic) is what I look at.
 
Sevens - Ones - Zeros

LB - DRIV - DECK
NGPS - SHFL - PETD
CIB - PHS - NTAP
LCAV - MRVL - ARTI
NAVR - CRDN - VCLK
TIBX - LSCP - HTLD
JUPM - TNP - CREE
VCLK - SINA - MTEX
ARTI - EAGL - AMHC
NTAP - SFCC - FFIV

Hotlist

NGPS
FFIV
JUPM
NAVR
SINA
PETD

Watch List

ESMC - DU Cycle - DU5 - DU10
LWAY - DU Cycle
ANIK - DU Cycle - DU5
SWIR - DU Cycle - DU5 - DU10 - DU20
HANS - DU Cycle
EVCI - DU Cycle - DU5 - DU10
ENWV - DU Cycle
SINA - DU Cycle - DU5
DPTR - DU Cycle
LIFC - DU Cycle

SRVZ Wealth Lab Equations - Dry Up

ECSI
ENWV
LIFC

G33M4K Score for the above Stocks

ECSI - 4
ENWV - 0
LIFC - 1

Gallas2 "Keep an Eye on These" Stocks

SWIR (Attached)

(VSEC, IDSA, HRT, LWAY, NVEC & NGPS have float outside normal parameters)
 

Attachments

Hi Spydertrader:

Dry-up:
Have you found any method works better than simply eyeballing for volume breakout from volume dryup, with volume dryup being eyeballed from historical pre-breakout levels? This assumes EOD trading and not looking at first two hours trading.

For a living:
You say you retired after one year of this. Is that starting with a large capital base, or did you do, as some people I know have in forex, increase a small stake by more than a dozen times in one year to get to that stage?
 
Quote from nzbryant:


Dry-up:
Have you found any method works better than simply eyeballing for volume breakout from volume dryup, with volume dryup being eyeballed from historical pre-breakout levels? This assumes EOD trading and not looking at first two hours trading.
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From various web sites, USENET Archives, and discussions here on elitetrader.com, I have seen several methods for calculating dry up volume. In my search for the best formula for automating the dry up calculation, I listed several of these methods in the following post from another thread:

http://www.elitetrader.com/vb/showthread.php?s=&postid=524735#post524735

Unfortunately, the search for the 'perfect' formula or method for Dry Up Volume calculation continues even today. The following URL links to a post that contains the 4 different methods used in this journal for Dry Up Volume calculation. I currently use several different methods because no one method has consistently shown to accurately anticipate a volume breakout.

http://www.elitetrader.com/vb/showt...0348&highlight=dry+up+calculations#post600348

Unfortunately, I have yet to find a formula that exceeds the results experienced by Jack Hershey and his 'eyeball method' of determining Dry Up Volume. An automated process for determining levels of DU Volume, FRV and Peak Volumes is located at the following URL:

http://www.wealth-lab.com/cgi-bin/WealthLab.DLL/editsystem?id=32994

I based the above Wealth Lab Chart Script on the work of Vorzo, Max_Gainz and others. I have used the above automated process for quite some time, and while not perfect, it does produce results.

Quote from nzbryant:

You say you retired after one year of this. Is that starting with a large capital base, or did you do, as some people I know have in forex, increase a small stake by more than a dozen times in one year to get to that stage?
More...

Prior to beginning the journey to learn about Jack Hershey, I experienced success trading Exchange Traded Funds (ETF's) - primarily the QQQ, but also the DIA and SPY. I have never traded in the Forex Market. I answered a similar question to yours in the "Part-Time vs. Full Time" Thread. Rather than copy and paste my answer, use the following URL to see a detailed description of my journey from EOD Trading to Full Time Trading.

http://www.elitetrader.com/vb/showt...7&highlight=part+time+Vs+Full+Time#post630427

I hope you find the above information helpful.

- Spydertrader
 
We generated no trading signals today - either long or short. Actual volume for our Watch List stocks failed to exceed calculated Dry Up Volume. Early on, it appeared as if both SINA & ENWV would have enough Pro-Rata Volume to generate a signal. However, this was not the case as pace of volume declined for both stocks. Both equities remain off the their respective highs.

We came close to having our 5% stop loss ($12.80) triggered with CALM. Current low of the day remains $12.85, and price has risen from that low at the time of this post. SWIR continues to rise in price, currently up .16, but off its high of the day.

- Spydertrader
 
HANS really took off today, but did so on relatively little volume. Total volume for HANS failed to reach the 65-day average. Volume for HANS failed to reach DU volume by 11:30, nor did actual volume reach FRV by end of day. In addition, since price didn't really accelerate until late in the afternoon, we might want to keep an eye on this stock for tomorrow.

- Spydertrader
 

Attachments

Sevens - Ones - Zeros
LB - SHFL - JUPM
IRS - EAGL - LCAV
NGPS - PHS - TNP
RSTI - NAVR - NTAP
TIBX - CREE - AMHC
ASPM - DECK - JCOM
PTRY - MTEX - MRVL
CIB - PMTI - PETD
URBN - CRDN - DPTR
GDP - SINA - ARTI

Hotlist

NGPS
JUPM
NAVR
GDP
PMTI
SINA
PETD

Watch List

VSEC - DU Cycle - DU5 - DU10 - DU20
IDSA - DU Cycle
LWAY - DU Cycle - DU5 - DU10
ANIK - DU Cycle - DU5 - DU10
TRMM - DU Cycle
SWIR - DU Cycle - DU5 - DU10 - DU20
ALDN - DU Cycle
EVCI - DU Cycle - DU5 - DU10 - DU20
NAVR - DU Cycle - DU5
SMTS - DU Cycle - DU5 - DU10
NTES - DU Cycle

SRVZ Wealth Lab Equations - Dry Up

ENWV

G33M4K Score for the above Stocks

ENWV - 2

Gallas2 "Keep an Eye on These" Stocks

NTES (Attached)

(VSEC, IDSA, HRT, LWAY, NVEC & NGPS have float outside normal parameters)
 

Attachments

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