Spydertrader's Jack Hershey Equities Trading Journal III

[mark1]

Quote from Atari:

How do I post a chart so that it shows within the text of the post, instead of just as an attachment you click on? I seem to remember directions being posted on this in the earlier journals, but I failed to bookmark it and have been unable to locate it through search.

Thanks,
-A

Adding Images

To include a picture or graphic within the body of your message, you can simply surround the address of the image as shown here:

Note that the http:// part of the image URL is required for the code.

You can even create a thumbnail-type hyperlink by surrounding your [img] code with a [url] code like this:

[url=http://www.elitetrader.com][img]http://www.elitetrader.com/i/l2.gif[/url]


***************************************

You can find the above instruction plus other code instructions by clicking on the RED link" ET Code" on the left of the Post Reply page ( the one that appears when you reply in a thread

u r welcome

 

[Atari]

Thanks for the information. I read through the instructions provided in the ET Code link. My understanding is that you can only include graphics that have a web address. So I can include a chart pulled off wealthlab chartscripts or yahoo as an image in text. However, a chart image I have saved to my computer can not be included in the text - it can only be attached to the post. Is my understanding correct?

Thanks again,
-A

 

[mark1]

Quote from Atari:

Thanks for the information. I read through the instructions provided in the ET Code link. My understanding is that you can only include graphics that have a web address. So I can include a chart pulled off wealthlab chartscripts or yahoo as an image in text. However, a chart image I have saved to my computer can not be included in the text - it can only be attached to the post. Is my understanding correct?

Thanks again,
-A

Once you post an attachment to ET, you can use that http link and actually post the image within a post text using the code above.

 

[mdl060374]

Quote from Spydertrader:

Final Universe Additions

ATV BCSI BONT SOLF

Final Universe Deletions

ARGN ASIA ENG GEOY GMCR GMKT MLNX RATE

Current Final Universe

ANW ATV BCSI BHS BKI BONT BPHX BTJ CALM CHDX CMED DBTK DRYS DSX EMKR EMS ESEA EXM FMCN FTK GIGM GLNG GRA GRRF GSAT GSOL HMIN ICOC JADE JASO JRJC KMGB LAZ LPHI LXU MALL MEA MTH MTOX NFI PTT QMAR RWT SFLY SIGM SNCR SNDA SNHY SOLF SSRX STAR TASR TBSI TGIC TRCR TSL ULTR VDSI VSR XING

Monday Dry Up

ANW BCSI BTJ GRA GRRF JADE KMGB MEA MTOX PTT SNDA TASR TRCR ULTR VDSI VSR XING

- Spydertrader

Spyder, I must be doing something critically wrong..


At this point I am just trying to get my lists in order as per methodology instructions. I understand that "tenure" will have some lists different than mine (since me being new eliminates tenured stocks from my scans, but you have multiple additions to your universe that arent even showing up on my scans..)

for example: BONT, SOLF, ATV??

I ran stocktables normal $10-50, above 80 EPS/80 RS NASDAQ/NYSE only. Then loaded that into a software program i use www.stockfetcher.com to find stocks whose average 65 day volume is > 200K. (this allowed a quick scan to reduce manually typing them into the JAVA script.)

Then used martyr's JAVA script given on page 32 of Journal II to weed out poor float and bad earnings.

this gave me a list of 60 remaining. then i used WL (RANK 1.0 SCAN) to reduce list for those that cycle.. Got 14 stocks....

then ran both 3 month DU 2.0 (only returned BCSI)
and HERSHEY 4.2 and got 5 BRUNO BUYS (BPHX, CMED, CRNT, ICOC, JRJC..)

Something seems wrong.

Perhaps the JAVA script is wrong.. Or perhaps your list is a rolling list of current dry ups for last week that havent left DU?

My results are using 11/30 updated data. This might be my problem. But this still doesnt explain those additions u mentioned that didbnt even make it onto the initial scan.

 

[Spydertrader]

Quote from mdl060374:

Spyder, I must be doing something critically wrong..

... for example: BONT, SOLF, ATV??

As mentioned in this post, and outlined in this post, I often scan the entire stock market, and not just the stocktables.com list.

Quote from mdl060374:

then ran both 3 month DU 2.0 (only returned BCSI)
and HERSHEY 4.2 and got 5 BRUNO BUYS (BPHX, CMED, CRNT, ICOC, JRJC..)

Something seems wrong.

Dry Up stocks do not equate to 'Bruno R' Buys. You need to run your Dry Up Scans against your Final Universe, or use an 'eyeball' method to gauge which stocks fall into the Dry Up Category. This you do after you have scanned for stocks to add to your Final Universe. You look for stocks to add by culling the Stocktables.com list, or by scanning the entire stock market.

- Spydertrader

 

[mdl060374]

Ok thanks, Spyder. I apologize, as I am still working through journal III.

I will finish that up b/4 I post again. I dont mean to be a pain.

 

[Atari]

I had a trade this week that illustrated some questions I’ve had and brought up some new questions. I’m going to split this into three different posts each relating to an attached chart on a different fractal (Day, 30 min., and 5 min.). Hopefully, my posts will turn out intelligible and I can get some good ideas and feedback.

I entered the trade in JASO on Thurs. 11/29 in the morning (candlestick B) and exited in the late afternoon on Fri. 11/30 (the last candlestick). I entered based on increased PRV from the previous day and the Bruno R indicator setup, which confirmed the FBO of the dark green channel and the FTT and BO of the maroon channel.

First, I would like clarification on channel drawing when there is a FBO such as with candlestick A. I believe Spydertrader’s general rule is that you do not have a BO, until a complete bar closes outside the Right Trend Line. I’m assuming when there is a FBO, such as with candlestick A, the original drawn RTL (dark green in this instance) still holds support significance to traders and is still valid. Therefore, a new shallower RTL would not be drawn using the low of candlestick A as a new point 3. Is this correct?

Similarly, I would like clarification with which candlestick should be used as a point 1 when drawing a new steeper channel. Would most traders ignore the low of candlestick A as a potential pt. 1 since it fell outside the dark green RTL and use the low of candlestick B as point 1 instead? The general way I’ve been handling these situations is that, if part of the body of the FBO candlestick closes below the RTL (as in the case of candlestick A), then I would give the low of that candlestick more significance and use it as a point 1. However, if it was a candlestick such as the type denoted with the red circle and only the long tail fell outside the RTL at close, then I would tend to ignore that low and use the next low of a candlestick that closed near or on the RTL. Basically, is there a general rule of thumb for these situations?

The final question I have for this chart is in regard to applying gaussian/jokari window analysis when you have a gap up candlestick that closes lower (as with the last candlestick). When the candlestick closes lower from its open, but still higher than the previous day’s close because of the gap up, it would seem you could argue for treating that days volume bar as either buy (black) volume or sell (red) volume. My uncertainty in regard to how to label the increased volume on the last candlestick was a big factor in me selling the position Friday (I will get into more specific reasons in my third post). It seems like a pretty important distinction since increased buy volume would anticipate trend continuation, while increased sell volume would anticipate a FTT.

 

[Atari]

I really only have one question with regard to this 30 min. chart, but I also wanted to include the chart to provide context to the bright green channel that can be seen in the next chart.

My question is in regard to drawing channels shortly after a gap day. It seems the larger the gap the less reasonable it is to expect the stock price rate of change to keep up with the slope of any RTL drawn using a low from the day previous to the gap as a point 1. On the other hand, the increased number of sellers created by rapid price increase plus traders trying to fill in the gap tend to make any RTL based solely on the gap day’s trading too shallow. I tend to err on the side of including the gap with my channels, as I did in the attached chart. I also included an alternate pt. 1 not including the gap - designated by the low of the candlestick pointed out by the blue arrow – there is not a lot of slope difference in this example, but often there is. Do most traders have a general rule in drawing channels with gap days?

 

[Atari]

My questions and observations with this 5 min. chart revolve mainly around timely sell decisions. I’ll start off by noting that psychologically I am more comfortable with getting out of a position too soon and missing further profits, rather than giving a stock more room and having to sell at a price significantly lower, if it does not turn back up. It’s in these holding situations where I risk losing my objectivity and not making a timely decision to sell. Considering this, I should have (and would have) sold at least part of my position right after the open when price got up to the Left Trend Line (bright green line that is barely in the top left corner of image) and fell off. Unfortunately, I neglected to draw in this IT channel prior to the trading day – mea culpa, won’t happen again. Even so, the situations are relevant to future selling decisions.

A lot of my questions result from the gap up situation and how it effects (confuses?) the PV relationship and indicators. I generally try to base my sell decisions primarily on the PV relationship and use the indicators as confirmation or an extra safeguard against mistakes. As recommended, I make these decisions based on the daily fractal and drop down to lower time fractals to time my decisions. However, as mentioned in the first post, I’m unsure of how to treat gap opens in my analysis of the PV relationship on the daily time frame. Therefore, I dropped down to the 5 minute chart to get a better feel for what was happening with the stock.

Looking at the chart, shortly after market sync has taken place, it looks likely that sellers have control based on the volume levels. By 10:00 R2B gaussians reinforce that we are in a downtrend. Since JASO is still firmly in the bright green IT up channel and an attempt to fill the gap is not uncommon in gap up situations, I decide to hold. By 11:20, price has reached RTL and breaks it shortly thereafter. I decide to give the stock a little room for two reasons: 1) the RTL includes the gap (so it might be a little too steep, 2) the gap has now been filled, and 3) as shown by the red arrow, the peak red volume levels are decreasing w/ each R2B which is typical of a nondominant retrace of the intermediate channel (bright green). So first question – in general, how reliable is it to apply gaussian analysis over longer periods on a 5 minute chart? I’ve found them pretty reliable bar to bar, but over longer periods with volume levels dropping off into lunch and then picking back up in the afternoon there is clearly going to be some distortion. In this situation, is my gaussian analysis to be trusted in 3) or should I just chalk this up to volume levels in general decreasing as lunchtime approaches?

As it turned out, JASO got price reversal to the upside (confirmed by B2B gaussian) and a BO of the down channel. However, price could not keep up with the bright green up channel. Once again, I decided to hold because it was pretty much lunchtime and the stock was likely to just drift sideways until volume came back in the afternoon. In the afternoon, most of the heavier volume seemed to be on the sell side and I decided it best to sell and bank profits going into the weekend (especially since I was unsure of how to read the gap). There was some strong buy volume at the end of the day, which makes me unsure that I made the right choice.

The main questions here are: 1) is there a general rule on how to read the gap day with PV analysis, which would allow me to make a decision based on the daily fractal?; 2) If not, I’m looking for objective feedback regarding the soundness of my analysis for holding until the end of the day (or selling at the end of the day, for that matter), instead of just selling when price broke the RTL.

I apologize for the length of these three posts – I just hope they make sense. Any answers, comments, or ideas are much appreciated.

-Atari

 

[Ezzy]

Quote from Atari:

Thanks for the information. I read through the instructions provided in the ET Code link. My understanding is that you can only include graphics that have a web address. So I can include a chart pulled off wealthlab chartscripts or yahoo as an image in text. However, a chart image I have saved to my computer can not be included in the text - it can only be attached to the post. Is my understanding correct?

Thanks again,
-A

After you attach a file, go to your message, right click and go to "copy link location". Then edit your message. Paste the link in.
Before the link type: < img src= (no space after the "<" )
No space between the "=" and the http.
Then end with this after the link: >

That should do it. Make sure the charts aren't too large or they all the posts on that page too wide.

You can practice here: http://www.elitetrader.com/vb/showthread.php?s=&threadid=37454