Quote from OddTrader:
If your trading method after learning from Jack for years represents a typital example of Jack's complete method, I just don't understand why none of you the capable students would not write up something clear and concise systematically, that would perfect the method to some degree, I believe.
Many find Jack Hershey a difficult read. I too encountered numerous challenges interpreting him in the beginning. Over time, one tends to develop an understanding of the message Jack tries to convey (at least for me it worked this way). In addition, Jack doesn't hand you everything at once. His educational style imparts bits and pieces to the student over a period of time in an attempt to insure each facet of the system becomes instinctual to the aspiring trader. Also, several iterations of the system exist - both from what Jack has taught, and what others have developed. Depending on where and when one first stumbled across the teachings of Mr. Hershey, one notices subtle differences in technique. By example, Jack Replaces Wilder's RSI with Warden's Balance of Power, and today, we use Accumulation / Distribution. Other differences exist between Jack the teacher and his students of the past. The system Jack uses from his home (equations developed for an older version of tc2000 and posted within the Journal itself) differs from our use of the stocktables.com web site. Jack began teaching the stocktables.com method here at ET around two years ago if memory serves me correctly. Lastly, the attempt to quantify the exact nature of the Dry Up Volume calculation differs greatly from Jack's use of an 'eyeball' method of Dry Up Volume Calculation. These many differences have resulted in much confusion over the correct path to follow. This Journal encompasses my efforts to compile all the available information regarding the Hershey Methodology into one clear and concise tool for learning.
Quote from OddTrader:
I can see some shorts in your sheet. Would you mind to summarize the conditions for shorting a stock?
The Jack Hershey Equities System remains a predominantly Long Alone System. Jack has only spoken briefly about the conditions required for successful shorting of the Hershey Universe. I have often recommended developing an expert level understanding of the Long Side before attempting to take on 'short' positions. However, a brief (but not all inclusive) summery of shorting criteria (that I use) would be: Stock "in Dry Up" the previous day, 25% of pro-rata Dry Up volume exceeded the morning of trading, Negative MACD, Stochastics below 20.
Quote from OddTrader:
Other than the maximum 4 days holding, is there any clear guideline or conditions for exits (profit and loss)?
Jack has suggested tightening of the stops and permitting price to "take you out" when the 'score' for a stock reaches 4. I have used MACD crossover, Volume pace change, time stops, and price targets in the past with various degrees of success. I plan to attempt to mimic Jack's "Score Exit." on the next trade.
Quote from OddTrader:
Initially you used about 20% equity each stock (I assume you trade only one stock at a time). However, you recently used more than 50% equity for COGT. Is it also part of Jack's way to trade size? Again, what are the conditions to increase size? Thanks.
Each trader has their own comfort zone with regard to risk. Earlier in the Journal I discussed using a maximum position size allowing for 2% risk of one's trading capital. Jack advises dividing the trading capital into various "streams" for making money and trading those streams daily. I have yet to achieve the same results as Jack Hershey, and as a result, I continue my efforts toward that goal. Occasionally, I break my own rules and trade larger size than I really should - based on my money management guidelines. COGT was such an example. Earlier in the Journal, I posted a trade size calculator written by another ET member. You might find it helpful.
The answers I have provided above only scratch the surface of The Jack Hershey Equities System. If you have an interest in learning more, I recommend starting at the beginning of the Journal. All the steps necessary have been delineated there along with links to background material to supplement the learning process. Good Luck, and I wish you tremendous success on your journey.
I hope you found the above information useful.
- Spydertrader
