Spydertrader's Jack Hershey Futures Trading Journal

[dougcs]

Quote from Spydertrader:

I consider all values. You use STR / SQU in the NOW. Whatever the value is when you go to obtain the data is the important value.
Check the STR / SQU value near trend lines. See the attached .gif file for examples of 'spike' bars.
{SNIP}
Anything in between +2 and -2 we consider as 'noise' and observe as 'no signal' given. values greater than +2 and less than - 2 create a signal. The greater the extreme, the larger the anticipated move. In other words, we expect a larger move on a value of +10 than we expect on a value of +3.

I hope that helps.

- Spydertrader

It does, thank you.

Another question, I've noticed sometimes the S/S hits an extreme but only very briefly while at other times it dwells for extended (at least it seems that way on a 1 min chart) time.

Does dwell time have any meaning. My observations, limited as they are, show there is some importance if it dwells >2 or <-2 for extended time.

Doug

 

[Tums]

today's chart

 

[PointOne]

You are short off the close of the FTT bar shown (doji). All looks good until the last bar shown. This bar is complete and is in Dry Up volume.

What do you need to see in the opening of the next bar to hold, exit or reverse? What do you suspect actually happens?

I am hoping to learn from your insights.

 

[Spydertrader]

Quote from dougcs:

Another question, I've noticed sometimes the S/S hits an extreme but only very briefly while at other times it dwells for extended (at least it seems that way on a 1 min chart) time. Does dwell time have any meaning. My observations, limited as they are, show there is some importance if it dwells >2 or <-2 for extended time.

Just as a stronger move in the STR / SQU represents a more pronounced move in ES price, so too does a 'sticky' move (one that seems to linger) allow us to anticipate a more sustained Price move compared to a STR / SQU 'quick pop' which immediately returns to the 'noise' area. In other words, sustained and big are better than quick and small.

Many things in life seem to mirror this same paradigm.

- Spydertrader

 

[guavaman]

What can I say and where do I begin. Although it has been done so many times it bears repeating. Let me give the obligatory thanks to not only Spyder who has really engaged in thoroughly selfless and gracious act, but to all those who have supplemented his efforts with their own insights.
Having said that,I have to say after reading through a good deal of the thread and its ancillary material; my eyes have nearly rolled up in my head. At times it is as though I have some very tenuous grasp of the method only to read the very next thread and chart and realize how desperately arbitrary all the lines appear. Truly overwhelming. Yet it also appears that others have mastered the method given the same info presented to me. Which at the present time remains a mystery.
Here at last is the query: Is there a succinct and straightforward description of this method, a primer of sorts (the Jack Murphy Channels for Building Wealth although descriptive it is not straightforward enough for my manifestly weak mind) that starts at the open (presumably the tape) and walks through EOD? I may simply have not gotten to it reading through the Journal. If anyone is aware of the existence of such an animal I would be greatly appreciative.

 

[Spydertrader]

Quote from PointOne:

You are short off the close of the FTT bar shown (doji). All looks good until the last bar shown. This bar is complete and is in Dry Up volume. What do you need to see in the opening of the next bar to hold, exit or reverse? What do you suspect actually happens?I am hoping to learn from your insights.

What do you need to see for continuation (in this case short) and what do you need to see for change (in the case reverse and get long)?

Assuming you used the FTT (Blue Doji Price Bar) as your signal enter into a short position, we also know that you have chosen to hold through the apparent retrace of your red down channel (nothing wrong with this, just setting the stage so to speak).

We note that Price exits the the red down channel on decreasing black volume. However, we know Price only leaves a down channel on increasing black volume. In other words, our Gaussians do not match our channel. The market has informed us that we do not have a correct channel. In such a case we need to fan out our channel in an effort to create a correct channel.

Once you have a correct Price channel in place, PRV Volume provides an answer for where we go next. If we see increasing black Volume, we know to reverse and enter long. If we see increasing red Volume on a PRV basis, we know to hold and remain short.

Based on the fact that we currently see decreasing black volume (indicative of a non-dominant retrace of a down channel), holding short remains the best course of action at this time. I anticipate continuation of the short channel once the market reveals the correct down channel.

Let me know how it went.

- Spydertrader

 

[Spydertrader]

Quote from guavaman:

Is there a succinct and straightforward description of this method, a primer of sorts that starts at the open (presumably the tape) and walks through EOD?

Try bundlemaker's video or Pr0crast's review document.

- Spydertrader

 

[PointOne]

Quote from Spydertrader:

What do you need to see for continuation (in this case short) and what do you need to see for change (in the case reverse and get long)?

Assuming you used the FTT (Blue Doji Price Bar) as your signal enter into a short position, we also know that you have chosen to hold through the apparent retrace of your red down channel (nothing wrong with this, just setting the stage so to speak).

Yes, in my experience, the Nikkei is a Forest level instrument, so I'd hold through the expected retrace which looks like noise to me - everyone getting shaken out of good positions. Going after every traverse does not seem to be efficient.

We note that Price exits the the red down channel on decreasing black volume. However, we know Price only leaves a down channel on increasing black volume. In other words, our Gaussians do not match our channel. The market has informed us that we do not have a correct channel. In such a case we need to fan out our channel in an effort to create a correct channel.

I've been fanning away for a while intuitively, but the above rationale gives me much more confidence that this is not a fudge. Leaving the old channels in place is important - so you can revisit what you thought you knew at the time.

Once you have a correct Price channel in place, PRV Volume provides an answer for where we go next. If we see increasing black Volume, we know to reverse and enter long. If we see increasing red Volume on a PRV basis, we know to hold and remain short.

Based on the fact that we currently see decreasing black volume (indicative of a non-dominant retrace of a down channel), holding short remains the best course of action at this time. I anticipate continuation of the short channel once the market reveals the correct down channel.

Let me know how it went.

- Spydertrader

Spot on analysis again, which I anticipated. I've attached the full day's chart.

If anyone is in any doubt about the PV relationship or remains sceptical, I humbly suggest you look closely at Spydertrader's most recent 2 responses to me. Just awesome.

 

[mephistoII]

Quote from guavaman:

What can I say and where do I begin. Although it has been done so many times it bears repeating. Let me give the obligatory thanks to not only Spyder who has really engaged in thoroughly selfless and gracious act, but to all those who have supplemented his efforts with their own insights.
Having said that,I have to say after reading through a good deal of the thread and its ancillary material; my eyes have nearly rolled up in my head. At times it is as though I have some very tenuous grasp of the method only to read the very next thread and chart and realize how desperately arbitrary all the lines appear. Truly overwhelming. Yet it also appears that others have mastered the method given the same info presented to me. Which at the present time remains a mystery.
Here at last is the query: Is there a succinct and straightforward description of this method, a primer of sorts (the Jack Murphy Channels for Building Wealth although descriptive it is not straightforward enough for my manifestly weak mind) that starts at the open (presumably the tape) and walks through EOD? I may simply have not gotten to it reading through the Journal. If anyone is aware of the existence of such an animal I would be greatly appreciative.

Don't despair, guavaman - we've all come from where you now stand. This stuff can simply overwhelm a person at times - especially when one begins to question his own abililties to actually comprehend what is being taught ( I speak of myself when stating this). At these times, it is helpful to just back off a bit, and focus on one specific task: for example, spend some time solely drawing 1-2-3 pt. channels. Then, after some self-assurance there, move on to the next idea. I'd be embarrassed to admit how many times I have returned to pg. 1 of this thread, and started in again.

If you accept the fact going in that a lot of time and energy will be required of you, but, at the same time are able to cast off such concerns due to your personal belief system - then you are well on your way to owning this stuff, and reaping the benefits. Best of luck on your journey ...

 

[ivob]

Quote from Spydertrader:

No. I do not 'take heat' in the sense most people use the term. When I say I 'take a loss' I mean to say that price has moved a certain distance before I realise I misread the market. Sometimes, I exit with a small profit. Other times, I reverse with a break even (wash) trade. Occasionally, I reverse and take a loss because I wasn't paying close enough attention, or the market moved too fast, or I was just plain too stupid to react quicker. The resulting reversal then provided me the 'loss' for that particular trade.



I don't make error's based on P & L. When I make an error, I have failed to read the market correctly for whatever reason. In such a case, I immediately recognize my error and immediately take action to fix the incorrect action I previously made. The distance price has moved before I take corrective action results from a factor of time. The faster I recognize my error, the more likely I end up with a small profit or wash trade. The longer it takes for me to recognize my error, the greater the opportunity for me to experience a loss. Those that have seen me trade live often note how quickly I reverse position once I recognize me error. I do not play the game of thinking, hoping or believing "it will come back." I take immediate action.

I hope the above post provides the clarification you were looking for.

- Spydertrader

Spyder,

Let me phrase my question in a different way.

Is it possible that you have more than three ticks or so paper loss (meaning current market price compared to entry price) while you still are convinced you are on the right side of the market? For example this can happen when you (think you) entered somewhere between point 1 and point 2.

Or would you conclude your entry was wrong and you get out to protect yourself and find a better entry?

regards,
Ivo