Spydertrader's Jack Hershey Equities Journal

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For those individuals still experiencing difficulty grasping the concepts espoused by Jack Hershey, I refer you to the following post from the beginning of this journal thread:

http://www.elitetrader.com/vb/showthread.php?s=&postid=593276#post593276

Where to begin? Start by heading to the Sputnick5 web site and read the system glossary located there. The glossary briefly describes a few of the concepts Jack uses throughout his posts. After reading the system glossary, click on "The Big Post I-X."

"The Big Post" provides an excellent overview of the concepts and provides general direction as to what we attempt to accomplish.

The ET thread started by inandlong distills the information further and translates the process of creating the Jack Hershey Universe.

At this point, the overall picture should be somewhat clearer - even if the specifics remain somewhat murky.

Within the same post, I provide a step by step guide to list formulation. This guide should assist you in the creation of your daily lists and point you in the direction of seeking which stocks to trade.

To see how others have created past lists, follow the MSN web site links. Always begin reading the oldest posts first on the MSN pages. JohnnyK's Web Site (mycoolstars) links Jack's old USENET postings, his newer MSN information and his ET postings into one location. JohnnyK also has information regarding Jack's Futures Trading Methods as well.

The importance of reading the background material supplied by Mr. Hershey allows the individual to gain an overall understanding of the process - to create a roadmap in your mind's eye of where you are, and where you need to be. As bundletrader pointed out, there are no short cuts to this process. I still review old USENET postings in an attempt to catch something I may have previously missed.

Finally, read Tomorrow's Newspaper Today for a graphical description of when to buy and sell.

I hope the above helps to clear up any remaining confusion.

- Spydertrader
 
Our system generated two possible signals this morning for the stocks: SMTS & EVCI.

The signal for EVCI occurred just after 11:00 AM this morning when actual volume exceed calculated dry up volume. Price held at $9.56 (an improvement over the previous day) and MACD (+.0175) and The Stochastic Indicator (98.8879) fell within our desired parameters.

SMTS triggered a buy alert at 10:37 AM when actual volume exceeded the calculated dry up volume. Price held at $15.33 (also, an improvement over the previous day) and MACD (+.0941) and The Stochastic Indicator (92.2145) both fell within normal parameters.

When we look at the average daily volumes for both these stocks, we see a problem. Both have average daily volumes well below our desired levels. EVCI sees around 68,000 trades daily, and SMTS boasts only 54,000. Jack Hershey recommends avoiding thinly traded stocks such as these to minimize risk, and as a result, I did not take these two trades. Since everyone has varying degrees of risk tolerance, I post these two possible trades for educational purposes only. Again, I did not take these two trades.

I hope you find the above information useful.

- Spydertrader
 
Hello Spydertrader,



It looks as if you have a good grip on the hershey method? Can I ask how long it took you to learn the method and how profitable do you find this method to be?

I have no idea if this method would work in a sideways or bear market.



kind regards,


Andrew
 
Quote from peugeot205:

It looks as if you have a good grip on the hershey method? Can I ask how long it took you to learn the method and how profitable do you find this method to be? I have no idea if this method would work in a sideways or bear market.
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The learning process continues for me even today. Since I began this journal, many of those following along have contributed greatly to my own learning curve by posting their own observations and efforts. In the beginning, the process didn't take me very long to learn because I simply followed directions. Step by Step. My problems came when I couldn't 'eyeball' the charts as Jack described. The turning point came when Jack posted, "If you can't do this, you may be in trouble."

Well, Holy $h*t! I certainly was in trouble. As a result, I searched for a method to automate the process. I theorized that if I could eliminate the hurdle of "eyeballing" by using the computer, everything would fall into place. During my research, I uncovered many aspects of Jack's System that I had previously missed - using the correct chart timeframe being the biggest.

Each person travels the road to enlightenment at a different pace. The same is true when studying the teachings of Jack Hershey. No shortcuts exist - except those provide automation to the process. Even if after 100 of hours of study, you find the system isn't for you, the wealth of knowledge you will have amassed will improve your trading exponentially.

Yes, I find the system to be profitable and possessing a positive expectation. As to how profitable it can be, see Jack's discussion on The compound Interest formula within "The Big Post I - X." I personally have yet to achieve Jack's level of profitability, however, I have posted the results of all trades taken since the journal began. Feel free to check out the results for yourself.

Jack has claimed the system works in all markets equally. In my own experience, I find the signals to be most frequent and of greater strength in rising markets. The system does work in all three market landscapes you described, but it simply works best in rising markets (according to my experience). YMMV.

I hope that helps.
 
Spydertrader,


Thank you for that most illuminating answer. Very helpful.


I wonder why jack has to make the material so inaccessible. I guess he genuinely wants to help people but not to the extent its so easy his own profitabilty is dented. That might be it (or not).
 
Quote from peugeot205:

I wonder why jack has to make the material so inaccessible. I guess he genuinely wants to help people but not to the extent its so easy his own profitability is dented. That might be it (or not).
More...

While I cannot speak for Mr. Hershey, I can tell you the answer to this question continues to be a subject of great debate. The degree to which someone 'gets' Jack's teachings appears to be proportional to the amount of his material studied: the more one reads Jack's writings, the easier it becomes to understand. In the beginning, I found Jack's style to be somewhat confusing, but I continued to follow directions and read the web sites for background material until everything clicked. The process takes time. Jack wants everyone to learn the "why" behind the "what to do."

Personally, I have always felt that Jack has chosen to present the material in such a way as to require the student to use a certain amount of effort to understand. I became convinced this was the case after hearing Jack speak live in the Paltalk rooms 18 months ago. Perhaps, I simply understood a greater amount of "Jackspeak" at that time than when I began. Either way, the process does get easier the more you read.

Follow the links to the background material, and follow the step by step guide provided in this journal. Take notes, and in time you will amaze yourself at how quickly you grasp the concepts that previously provided you such difficulty.

Good Luck on your journey, and feel free to continue to post any questions you may have.

- Spydertrader
 
Spydertrader thanks for that reply. Yes it makes sense now and I feel happier ploughing through jacks material knowing I am likely too see light at the end of the tunnel.


best regards and thanks for being the main driver behind such a useful thread
 
Spydertrader, welcome back. Was wondering what your opinion was so far on the concept of using the 25/50/75% prorata dry up volume entry? This seems to be a relatively new development in the journal and I realize the bulk of the successful trading you've done with the Hershey equities method in the past has been with the standard volume exceeding DU by 11:00AM entry.

In my personal observations, I've noticed that sometimes a given stock's volume can hit 25% of the calculated DU before 10AM, then stall out and fail to reach DU before 11-11:30, or sometimes for the rest of the day for that matter. On the other hand, I've seen where using this can get you in a stock earlier in a breakout as well. Hmmm...

-John C.
 
Quote from johnc99:

Spydertrader, welcome back. Was wondering what your opinion was so far on the concept of using the 25/50/75% prorata dry up volume entry?
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My experience with pro-rata volume entry remains limited at this point, however, it does appear that the pro-rata approach appears to improve profitability somewhat. As you correctly observe, a stock exceeding pro-rata volume at a 25% level can still fail to exceed calculated dry up volume by 11:00 or 11:30 AM. Although in this example dry up volume failure occurs, price has often improved slightly creating a slight profit or wash sale. In addition, pro-rata volume entry catches those "early movers" - stocks that that take off and reach a 5% gain before reaching dry up volume - providing added profits to the overall account.

While I have yet to formally create a rule based approach to pro-rata volume, I do see the potential. While further testing and evaluation should provide a clear set of circumstances for using pro-rata entries, it appears that pro-rata entry provides improved profitability without a corresponding increase in risk.

The best example of this is the use of a previous day volume entry when a stock is in dry up and has a G33M4K score of zero. This 'special subset' of Hershey Stocks may very well react differently under certain conditions, and therefore may require slightly different trading techniques. I plan to continue to evaluate the various techniques and determine when best to use each.

I look forward to reading your thoughts on the matter as well.

- Spydertrader
 
Spydertrader, thanks for your thoughts on this. In order to reduce risk and help prevent early "false" volume signals, I was thinking of modifying the approach somewhat by splitting the difference between the 4 level pro-rata entry and your original full dry up entry. In other words, use only the 50% DU signal (by 10:30) and subsequently the 100% DU signal by 11:30 if the 50% signal fails and volume "speeds up" in the 2nd hour of the day. In such a way you might avoid a false volume spike signal in the morning and still have some of the benefit of "getting in early" that the pro-rata approach offers. The 75% signal can remain of course, but I was just simplifying things a bit. Just my thoughts.

I also like your ideas on the g33m4k zero-score stocks and previous day volume entry... still pondering that one.

-John C.
 
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