Spydertrader's Jack Hershey Futures Trading Journal
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Mak created an Excel Spreadsheet which shows how Price moves with respect to various Volume Ranges. Armed with such knowledge one should most definitely have the ability to anticipate where Price would fall respect to the left trend line when combined with the use of Gaussians (and in this case PRV).
- Spydertrader
Hi Spyder,
I wanted to ask you for something that will speed up the progress of all students tremendously. You have taken a huge undertaking in educating all of us, and it would benefit many if we had at least several days of video/audio capture of what you do every day.
The idea is very simple, using video/audio PC capture software, you can record several days of how you trade and make your decisions.
I will find a place to host these videos for all of us to access them. The effect of these videos will be huge. I used to teach in the past and hold one teaching saying very dear: âA picture (video) is worth a thousand wordsâ.
Seeing how you make these decisions in real time would make all the difference for many.
Thanks,
redduke
I wanted to ask you for something that will speed up the progress of all students tremendously. You have taken a huge undertaking in educating all of us, and it would benefit many if we had at least several days of video/audio capture of what you do every day.
The idea is very simple, using video/audio PC capture software, you can record several days of how you trade and make your decisions.
I will find a place to host these videos for all of us to access them. The effect of these videos will be huge. I used to teach in the past and hold one teaching saying very dear: âA picture (video) is worth a thousand wordsâ.
Seeing how you make these decisions in real time would make all the difference for many.
Thanks,
redduke
Here is a drill that has helped me to
1) Not get hyper about a bar that is changing color (red/blk/red/blk) frequently and
2) be patient with my positions as long as I am in the right side of the market.
I have run this by Spyder and he has given me the OK to post it. It comes with some caveats please pay attention to them.
1) This is not a trading strategy. Do this drill a few times it might click for you or it might not.
2) In one particular instance the drill will fail to produce the desired result. I will explain what that is at the end but if you understand why the drill failed it will not affect you.
3) You will monitor your P/L for only this drill. This goes against what Spyder has told us, but I think it really helps in this drill. So ONLY monitor the P/L while you are doing this drill. Also note that we are not using the P/L to decide our exit criteria it is just to get you your mind used to the idea of price going against you.
Now to the drill. Determine your resolution level (Forest, Tree) and draw the gaussians to determine the current dominant direction. Once you are done, take a Sim trade (or note the price on paper) in the dominant direction as soon as a retrace starts. Hold the position until a B2B or a R2R in you resolution levels signals a change in dominant direction. Unless the price breaks out in the opposite direction, price will resume in the dominant direction and you will more than likely end up being profitable or almost break even.
Why do I suggest entering on the retrace? It is because the retrace guarantees the price will go against your entry position and this drill is about getting your mind to not worry about how much price has gone against you as long as you are on the right side of the market. Your P/L is showing increasing red but you are calm since the market has not told you the dominant direction has changed.
Just note how may ticks you were down and how being on the right side wiped most or all of that away.
Let me touch briefly on caveat #2 and where it could fail. Since we are entering on a retrace, that retrace could be the one that results in the breakout in the opposite direction (so we are in the wrong side of the market). To lessen the chance of that happening I would suggest doing this on the first retrace. If you do get a BO, reset, try a few more times you will eventually get a few where the market does not switch the dominant direction on you.
I now don't worry too much about the color of my bars or how much price has gone against me as long as I make sure I am on the right side. I used to be very hyper - oh its red better go short, now black reverse ... you get the idea
.
Let me know if you have any questions.
1) Not get hyper about a bar that is changing color (red/blk/red/blk) frequently and
2) be patient with my positions as long as I am in the right side of the market.
I have run this by Spyder and he has given me the OK to post it. It comes with some caveats please pay attention to them.
1) This is not a trading strategy. Do this drill a few times it might click for you or it might not.
2) In one particular instance the drill will fail to produce the desired result. I will explain what that is at the end but if you understand why the drill failed it will not affect you.
3) You will monitor your P/L for only this drill. This goes against what Spyder has told us, but I think it really helps in this drill. So ONLY monitor the P/L while you are doing this drill. Also note that we are not using the P/L to decide our exit criteria it is just to get you your mind used to the idea of price going against you.
Now to the drill. Determine your resolution level (Forest, Tree) and draw the gaussians to determine the current dominant direction. Once you are done, take a Sim trade (or note the price on paper) in the dominant direction as soon as a retrace starts. Hold the position until a B2B or a R2R in you resolution levels signals a change in dominant direction. Unless the price breaks out in the opposite direction, price will resume in the dominant direction and you will more than likely end up being profitable or almost break even.
Why do I suggest entering on the retrace? It is because the retrace guarantees the price will go against your entry position and this drill is about getting your mind to not worry about how much price has gone against you as long as you are on the right side of the market. Your P/L is showing increasing red but you are calm since the market has not told you the dominant direction has changed.
Just note how may ticks you were down and how being on the right side wiped most or all of that away.
Let me touch briefly on caveat #2 and where it could fail. Since we are entering on a retrace, that retrace could be the one that results in the breakout in the opposite direction (so we are in the wrong side of the market). To lessen the chance of that happening I would suggest doing this on the first retrace. If you do get a BO, reset, try a few more times you will eventually get a few where the market does not switch the dominant direction on you.
I now don't worry too much about the color of my bars or how much price has gone against me as long as I make sure I am on the right side. I used to be very hyper - oh its red better go short, now black reverse ... you get the idea
.Let me know if you have any questions.
At least once a day. Some days as many as two to three times. As I said early on in this Journal, a trader should not have as a goal: error free trading. A trader should strive to quickly, and accurately recognize their error (and this recognition should come before "price moves against my position") and fix any action taken as a result of the error.
Because I started with equities, and not futures directly, my surprises came on 30 minute bars. Last November, I completed a thorough review of each trade (from Journal One). Without a doubt, each and every 'surprise' resulted from my failure to recognize change. However, unlike the way I have recommended individuals follow this Journal, my surprises resulted in financial loss. With futures, my surprises now come when I know I am right and I ignore the signals provided by the market. On occasion, I make an error as to the price formation leading me to 'see' something that isn't there (A chatroom log exists where this happened, and I immediately stopped trading in an effort to determine why the error occurred).
I'll give you an example.
One day, while visiting Tucson, I looked at Jack and said, "What's all this nonsense about YM leading the ES? Look right here on this chart. Clearly the YM is heading in an opposite direction than the ES. As such, this YM leads the ES stuff is total rubbish."
Jack's response:
"The YM is a leading indicator of Price."
Huh? WTF does that mean??
Of course, I sat there wondering what the hell I was supposed to say next, and recall thinking at the time,
"The old man is off his rocker! I can see right there the YM doesn't lead the ES!"
A few months later, everything clicks into place, and I realize, it wasn't Jack who had the problem. I had the damn problem! I was interpreting everything Jack said through my own mental filters. I decided, on my own, that "YM leads the ES" must mean, "The YM always leads the ES" rather than, "The YM leads the ES at points of change.
Now, some might say that Jack could have been more clear. Instead of blaming the professor, I chose instead to realize that anytime I encountered an obstacle, all I needed to do was attempt to determine what possible meanings Jack wanted to convey, and then apply the different interpretations to the problem (this is why I have always advised looking at a problem from different points of view). Sooner or later, I'd arrive at the correct meaning and / or interpretation. I'd know I'd arrived at the correct interpretations Because, when i did, the problem was solved. By following this 'problem solving paradigm' I then had the ability to remove my own mental bias from the equation, and determine the true intent of Jack's posts or advice given in person.
From that time forward, all of Jack's posts have become crystal clear.
I hope you find the above information useful.
- Spydertrader
While I clearly understand the value of video / audio recordings with respect to 'seeing' through another's eyes and 'hearing' the thought process throughout the trading day, keep in mind, I am on vacation. While I do plan to record part of the trading day later in the year, everyone needs to review Mak's post (as shared by Avi 8). The answers you seek already exist inside your brain.
- Spydertrader
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