Spydertrader's Jack Hershey Equities Trading Journal III

[Jason M]

Hello all,

I've been lurking for a while but this is my first post. Thanks to Spydertrader, Jack Hershey, and everyone else who has contributed to these journals. As a Wyckoff student, I'm excited to see some other traders out there who are focused on the interrelationship between price and volume. I've read Journals I, II, and III, as well as the Futures Journal. I thought I was trading the beginner's equity system correctly until Spydertrader's recent post. I now realize I may have gotten confused on a couple of issues along the way. I'd appreciate it if Spydertrader or anyone else can help eliminate my confusion with regards to the following:

Quote from Spydertrader:

In Journals One and Two, I avoided trading any stock which lost its rank. Too often, a stock which lost rank one day would tank within a few days of finding itself benched.

My understanding was that a stock would not be deleted immediately upon losing rank. I thought this deletion only happens at the end of each month. Like Buffalow, I did not delete CTRN or SIRF at the end of December because they both still had rank. I just reviewed the following post by Spydertrader from Journal I (on 5/8/05):

Quote from odelys:

From my point of view it seems to me that clearing the final universe on a daily basis makes more sense than cleaning it only once a month on a "jour fix". I think stocks that do not fulfill the requirements, have no right to stay within the list. Any arguments on that?



Often, a stock which loses its rank on one day, regains ranked status within a few days. Similarly, an equity might fall below the average daily volume minimum for a few days, only to rise above the minimum a week later. In both these examples, we still had high quality stocks. They just didn't meet our minimum requirement over a certain period of time. As the 200,000 share minimum reflects a "trading account size" parameter, rather than a "system" parameter, it seems silly to disregard a possible equity simply because it temporarily falls below an arbitrary standard (some individuals DO trade equities below this level of volume using smaller account sizes). Over time, the Final Universe List expands and contracts based on daily additions and monthly deletions.

(Spydertrader)

So my question is, are CTRN and SIRF valid trading candidates under the beginner's system at the current time? Or do you keep them in the Final Universe until the end of the month just in case they regain rank, but avoid trading them until they do so?

I have one more question about the following quote from Spydertrader:

However, things work a bit differently in Journal III. While I have still posted the DU Stocks based on the Chartscript Volume Calculations, you'll notice I have also posted a number of "Outside the Box" Charts recently. As I explained in this post, I hope to expand the horizons of those following along. As such, I encourage you to not only focus on your Final Universe Stocks, but also to focus on the list of stocks obtained by using the additional culling parameters (25% Insider Owned, 25% Institutional owned)

- Spydertrader [/B]

At some point in Journal II, I got the impression that you had added the >25% Insider Ownership and >25% Institutional Ownership filters to the original culling methodology. Also, in the post linked to in the above quote, it appears that the difference between the two lists was that one was culled from the high RS and high EPS Rank stocks whereas the other was culled from the entire universe of stocks. But the above quote appears to say that the difference between the two lists is that one uses the Insider and Institutional Ownership filters whereas the other does not. Would someone mind clarifying the two different culling methodologies?

Thanks again for the great journals. I've been practice trading the beginner's system (with fake money) for about 5 weeks. I've also been shorting my final universe stocks per Spydertrader's parameters. I track the short trades in a separate spreadsheet since they are outside the beginner's system. I've had limited success so far with the longs (+1.7%) but tremendous success with the shorts (+8.2%). I'll be interested to see how things develop over the coming months.

Jason

 

[Spydertrader]

Welcome aboard, and I hope you continue to find the information contained within the various threads useful to your trading.

I have parsed your questions as such:

Quote from Jason M:

Do you keep them in the Final Universe until the end of the month just in case they regain rank, but avoid trading them until they do so?

IF using the Beginner Methods, one should avoid trading any stock without rank. However, keep the equity 'on the bench' until the end of the month - on the off chance it regains rank. If trading advanced methods ("Between the FTT's") feel free to trade these 'benched' stocks as they attempt to regain rank.

Quote from Jason M:

Would someone mind clarifying the two different culling methodologies?

Previously (Journal Two), I added the 25% Insider Owned parameter to the culling Process, but not the 25% Institutional Owned Culling Parameter. At the time, my testing did not show a statistically significant advantage to adding the 25% Institutional Owned parameter, In fact sometimes it tested out worse. However, this limited testing focused only on Final Universe Stocks. Adding both of these two additional parameters to the culling process insures using "High Quality Equities" for any 'Outside the Box' trades one might make.

Hope that helps clarify things for you.

- Spydertrader

 

[gorene]

In the past I was able to scan a list of stocks and get their ranks,
Now I try and do this and I am unable.




Don, I think this is what you are looking for: Hershey Equities Rank Scan v1.0.0

 

[Gandolph]

Thank yuo!!!

 

[buffalow]

My Watchlist of stocks in DU for Friday, 1/12:

GIGM, HWCC, MIKR, XING

 

[virgintrader]

Quote from virgintrader:

Trades for today..

NVEC at $31 (hmmm..double dipping allowed?)

CRZO at @26

I gotta run; i'll post the charts later tonight. Good luck guys (and to me). Here is my problem now...I have NO way to monitor FRV or not before EOD to close the position; im using today's low as the stop. Suggestions anyone?

Again, Thanks

CRZO +$0.40; NVEC stopped out -0.50loss; net -0.10 so far. Still have CRZO.

What could I have done better with the NVEC trade? (I had a weird gut feel taking it); was in the "blue" when I left for work; couldn't monitor so I left a stop loss.

CRZO looking to break $27 otherwise..

DUV for tomorrow: GIGM HWCC and XING

Cheers!

 

[Huskydog]

Quote from buffalow:

My Watchlist of stocks in DU for Friday, 1/12:

GIGM, HWCC, MIKR, XING

I have the same.

- Huskydog

 

[buffalow]

PKTR may be worth watching.

 

[gooch87]

Here is my chart of SWFT. I think we will need some extraordinary volume to push price above the red down trend line (RTL). Perhaps the pennant is offering a clue. We will have to see.

 

[mischief]

VirginTrader,

It's been my experience that closing next day on open yields superior results for stocks that fail to reach FRV than closing at EOD.

To do this I use an 'OPG' market order (assuming you're trading using IB, not sure if other brokers have similar orders).

BTW, I live in Australia and auto-trade the 'beginner' system as outlined by SpyderTrader at the end of Journal 1. Something similar may work for you during the day while you work. Not sure what setup you have, but it IS possible to automate much of this.