Spydertrader's Jack Hershey Futures Trading Journal

[cnms2]

To those experiencing difficulties in staying at the forest / tree trading level, and to those that feel that they'd benefit from improving their exits, I suggest to look into determining the current market trading fractal using Jack Hershey's "tampa tape fix".

I apologize if this seams a little outside Spydertrader's approach to SCT, but I found it useful and I hope it might help others as well. Those interested might want to review "The Stochastic Indicator" thread, and the "Channels for Building Wealth" document.

Further, I'll post a few excerpts from that thread:

...

We have channels understood. Now we learn to use fractals to lengthen the money making period. This will be the most relaxing part of this whole trip to being rich ASAP.

There is another tape to deal with. You can determine the market pace by simply looking for the tape. Use yesterday. Go form 5 min to 1 min and see things get jumpier. Go back to 5 min , then 15 min and finally to 30 min.

Look at what happened to the channel you drew in. At some point you see that the price bars fill the channel like a child painting (coloring) between the lines. This is a “tape” at that point. This tape is a band running at a given slope as a price channel. We are always day trading off the 5 min for the time being.

The “Tampa Fix” is the process to go to the fractal that gives you a “Tampa Tape”, i.e., a tape that fills the channel up with price bars. You sit on this fractal and trade. You use the next faster to get your stop log and you “anticipate” there as well.

...

For today (Tuesday) go further up the fractal list to see the tape. Yesterday's tape is showing today as an expanded volatility tape. This widened channel gets filled if you go to slower fractals. with yestedays cahnnel lines in still (extend them for example), you can see that the price lines are slopping out on both sides and the slope is unchanged.
Got from 5 to 15 to 30 to 60 and you will get the picture. See alternating red and black lines that would fill a wider channel of the same slope.

All of this will go far to keep you in trades longer and pull down more profits.

...

Look at what happened to the channel you drew in. At some point you see that the price bars fill the channel like a child painting (coloring) between the lines. This is a “tape” at that point. This tape is a band running at a given slope as a price channel. We are always day trading off the 5 min for the time being.

The “Tampa Fix” is the process to go to the fractal that gives you a “Tampa Tape”, i.e., a tape that fills the channel up with price bars. You sit on this fractal and trade. You use the next faster to get your stop log and you “anticipate” there as well.

...

NOW. You must go the the slowest fractal to do this. I knoww that you have to recalibrate the Tape and the "away" values. Get with it and do that.

Today, march to 15 min and 30 min and just sit in a short from the open. If you look at the 5 min just see the MACD weaving along "away" short in a range. Do not crap out every time it hits-.5. Go back to the15 or 30 min and relax so you can't see it on the 5 min. You aren't even thinking of going to the one min.

Now my review. isuggested going to slower fractal several days ago. I showed the "tape" channel on the 15 and 30 min, then the second day we had to go to 30 and 60 to see tape channel.

Tape channel means the bars filled the channel.

Today we are on a nice 15 min tape channel.

Why can't I get tampa off the one min?? If making money is able to intefer with his thoughts, then he will go to the slower fractals and calibrate the MACD.

For rocket folk, you are in heaven on the longer bar fractals. All trends look like rockets amd now you can just go there and soak up the money.

BUT, you can never start to learn to trade there on the 15, 30 ,and 60. The reasons are clear, you do not have enough capital. You do not know about protective stops. You do not know how to perscieve ends of trends. And the slower fractal trends you see are not fast paced short profitable trades to make money and learn to SIDELINE.

On the slower fractals the money velocity is much smaller. It takes more time to make money.

It is best to make money fast and wait for another chance as a beginner.

...

Posted by jack hershey on 03-14-03 09:11 AM:

Summary update

General stuff.
We have been getting some really great times here for moving into the groove.

A couple of weeks of really perfect sidelining stuff with flat markets. Here we learned two things:

You only make money when there is a trend.

You stay sidelined to minimize risk in flat markets.

The major key in this start up was to "tape" the 20/80 band.
We also checked out the compound interest formula to see that a minimum steady daily profit did make progress. We did not compound it seriously by adding contracts (the postage stamp curve thing up to this point)

We also had so very good looks at "wash" trading as a way to:

Exit when there is no money to be made. This is done by working at getting out of ice bergs as a beginner who only trades rockets.

We also had a couple of people perceive the timing of a rocket going into congestion and they are doing the slalom trades (short, long, short long, etc) through congestion into the convergence then centering.

Next I introduced how to eliminate the "hair rigger" exiting that was going on. Lots of people have NLP pictures of entering, making money and then holding as it fades and they get into loosing situations. They counter with premature "hair trigger" exits and give up a lot of profits.

What I did was get you to move to slower fractals and use your indicator knowledge and signals to relax you away from the hair trigger. Then I kept you refferring to the 5 min as a standard place to start out.

The second element of this was the points 1,2,3 channel start up lines for your price graph. Once we understood the "right side" and how you see formations end onlt to begin new channels within their endings, we were able to specifically focus on the "hair trigger" syndrome of "what is going on here, now that I m in a trade?" This is the pemature critical point of all critical points. We occupied ourselves with an alternative effort and avoided the premature exit. There weresome great results posted in terms of mental shifts.

The "tape" we learned during this interval was moving to the slowest fractal that "fills" the points 1,2,3 channel with price bars like a child "coloring between the lines". You got to se the indicators and stuff working just like they do on the 5 min beginner stuff.

I mentioned having to set point 3 again like an airplane takes off first steeply and second then at a climb rate to get to cruising altitude.

Several times we have seen trends continue into the next day. Some have gone for three days.

We also have it down on the open and close that there are "end" effects. We trade after the market synchs. We just wait 15 min and then go to work. Some, intermediate and advanced guys, are watching the synch because it is info laden (later posts will get that fixed).

I spent some really valuable time calibrating people too. I think the MACD adjustments I made on Tampa will easily drive him to being a millionaire. The two parts were the "entwined" and the sequence: converge, xo, and diverge.

If you are religious and want to compress getting to being a millionaire, you have to do a couple of things. Do the three ring binder several ways. Ugh. I know you will hate this. But if you do it and say everything out loud, you will see what I mean. Look at next post for this stuff.

Today we move out to complete the fractal theme iI have running. See next post following this set up summary.

...

 

[cnms2]

...

Fractal round Up.
We have an operational fractal... the 5 min. We use 1 min for anticipation.

We learned to "tape" to the trend operating fractal. The price bars fill the "Tape" and we treade there using our signals from our indicators.

So far we have only gone to the slower fractals.

Today you get to see how to deal with FAST paced trends.

There are markets and there are trends. Each has a pace and don't think about the differences or similarities... It's NIKE time... just do it.

Today just pounce on the 1 min and do the trades.

...

The point is this: I want you to be in fractal heaven. I am getting you to a place where you can dicern what fractal to be on by looking at the performance of the indicators signals we use to make money.

This intellectual transition is a killer. You are finding out that for all trend paces, the indicators work exactly the same IF YOU AREON THE CORRECT FRACTAL.

...

It should look like the 12 chart sgments I did on the weekend under the thread entitled "determining trends".

Friday's lateral ended.
point 1 at 9:45; point 2 at 9:55; point 3 at 10:05

Go to slower fractal to get "tape"

back on 5 min new point three at 11:45

It BO's into a lateral trend at Noon. trend is over.

...

TAPING.

The "taping" process is one where you slow everything down. Price need never scream at you.

What we are doing is getting trend and volatilty to work together for us and also eliminate the noise that signals ride upon.

The market always has a threshold of noise. we want clear indicators and their respective signals. The pace of the market tells us how often we need to regard things. We want to calmly continue to continually make money and take profits.

We go to the pace the market tells us to.

In the AM, we pull down the carry over trend if possible, we sit through synch. we look for entry signals and as they arrive, we do point 1,2,3 to get the trend. This channel envelope is traversed over and over.

what we do is switch to slower fractals to see bars that traverse the channel all the time. we have a channel and we then fill it with bars the width of the channel. This puts us on the fractal that the market is trading upon. I call the bar-filled channel a tape. The chart shows a band (tape) moving along making money. All the traverses are there and they appear to be just getting the job done.

The indicators have calmed down and volume is changing more smoothly. We occassionally zip to the fractal for doing our stop log. we also hang on the 5 min as our nominal fractal. In this way we are current and not emotionally overpowered by stuff that shouldn't upset us.

...

Now I am beginning to take you through the life of a channel. this is going to be a terrific process. We want to exit channels on the max profit. We need to "read" the channel travrses and catch on to "What wasn't that?"

if yiu have a hitch which is a stall that is dipping; then you have less strength in a traverse. volume will be lighter too. A stall is a strong series of bars. It does not retrace like a hitch does.

At first i sent you to the fractal that "taped" so you couyld not see the traverses. They just appeared as equal length bars. Now we are opening up a little so we can max out on thrends.

Once we max out, we can learn to do reversals to stretch the next profit cycle. this is a two for one in profit making.

you make more on the first exit and you get into the next trade at optimum.

I had to do washes first to get you ready to max profits exits, max entries and BE PREPARED TO SLALOM on congestion.

Knowing hitches and stalls is part of this too.

...

“So we take a glance at the 1 min chart…….. think about what "tape" is running on what bar duration (fractal)”

A tape is a portion of a price bar chart that has no white space. That is to say, the width of the tape is filled with the high and lows of the price bars. Is this correct?


****yes

Yet it seems as if you are determining tape by viewing the 1 minute chart only

8888No my point was to find tape (30 min) and look at the details on the other (1 min).

, of which the tape is a single bar on the 30 minute. What on the 1 minute chart tells you this?

*****Nothing. You have to go out, meaning reset the duration successively until you get a long enough duration to show tape. then with tape showing you look at the indicators. the indicators will work on all fractals and if they show a rocket on 30 min tape, then it is a flawless trend that is supported by a proper level of volume. This gets rid of the hair trigger stuff. You still run stop log and stay 4 entries back on the C&R's. You are at a place where you do not get frazzled by moment to moment "noise" and you onlt see strong signal. you are making money at a given money velocity and you don't mess with the sort of give and take of price as it builds profits over time.

Periodicity of an indicator? time period between peak and trough of something or other?

**** Money is made in bunches. How long a bunch of money accumulation is turns out to be half a cycle. Because we make money long and short we get two bunches per period.

...

 

[WGTrader]

It was about time for our periodic “How come we’re not making money yet?” discussion. These things seem to come in waves for some reason. Oh well. Some good points have been raised, but my own experience is this. I am light years ahead of where I stated in January. I can’t even imagine looking at a chart now without channels and gaussians. I do use my newly acquired charting abilities (on a slower fractal) for the placement of non-directional option trades and have no complaints. But I am not trading futures yet. I am not even simming regularly. While I have proved to myself that I can recognize an FTT and take the trade for a couple of points here and there pretty much any day of the week (it’s more like scalping), that is not my goal. My goal is to learn the JHM of SCT fully and proficiently. However, to do that takes a thorough rewiring of the brain and one cannot do that if they are focused on a P&L. I have noticed that since I stopped simming, I am more focused (and more relaxed as well). I challenge anyone still in the learning stage to say that when they are simming, they are not thinking about their P&L some of the time and that will affect when you enter/exit a trade. Your P&L should be irrelevant to when entering/exiting a trade. When I do start simming again, I hope to be at a point where I literally don’t even look at my P&L till the end of the day. When I can do that, I know I will have trained my brain. As discussed a couple weeks back, one needs to be prepared to make the time commitment to learn this stuff. There is a very good reason why Spyder’s syllabus is one year long! It may not be apparent for a few months, but as time grinds on, it becomes evident. I’m holding out for the brass ring!

 

[Tums]

Exit is a dirty word.

 

[Tums]

Nobody ever Exits a trade because he has "made" enough money.

No amount money is ever enough.



People exits a trade because he does not know what is coming next.

He is uncertain.

He was doing his MADA... he got through the M and the A, but could not arrive at a D, therefore the obvious A to him is EXIT.


or maybe he wasn't doing his MADA...


I feel sad.
Life is so beautiful, and he has to cut it short.

 

[guavaman]

Quote from WGTrader:

While I have proved to myself that I can recognize an FTT and take the trade for a couple of points here and there pretty much any day of the week (it’s more like scalping), that is not my goal. My goal is to learn the JHM of SCT fully and proficiently.
[/B]

Exactly the point I was so clumsily trying to make in my earlier posts. I focused on "exits" rather than "reverses" and by extension learning how to trade the SCT way.

I do use a simulator, but I do not look at my P&L during or after the day. It doesn't matter to me. I don't care at this point in time whether I make a good trade or not. The purpose of the simulator (to me) is to better learn how to apply what I have learned. I didn't raise the question about exits to maximize my P&L but rather to develop a dialogue with others of how they were employing SCT or any close approximation to it.

In my clumsy way anyway

 

[TIKITRADER]

Bearbelly

Most people on this thread are not trading. They are only trying to learn how to read the market.

Learning how to read the market. I have come a long way, but the road ahead, is a very long one.

Thanks to all, who work hard, the journal progresses steadily.
It is an ongoing process that continually strengthens, as the experience of all in learning, is brought to the journal.
To reinforce what is being taught, is understood, and that this is a year for learning.


bundlemaker

Now, there is an element of trust involved.
You would need to trust that what Spyder is teaching actually works
and that he's not leading us down some black hole.


I have to believe that Spydertraders intentions are good.

The patience he has with everyone, to make sure we fully understand what is presented, is not the intentions of someone who does not care about everyone, and their ability to move forward.
Every individual question is answered, and the time is taken until there is a grasp of what is presented .

This is someone who cares.

dkm,
your posts are well thought out, thanks.

 

[nkhoi]

Quote from Spydertrader:

... If one cannot accurately describe continuation or change a minimum of 81 times per day, then I suspect focusing on enter and exit signals isn't a good use of one's energy. Profits are not yet the metric one uses to gauge performance - especially, if one still needs to learn to 'see' market signals.

I can't see clear signal 81 times but I know one day I will. I do see some clear repeated signals every day which I continue to train myself to recognize them faster still.

To those individuals who have already reached and exceeded this threshold, congratulations and a job well done. Perhaps, you can provide some guidance to those who might succumb to the temptation to skip ahead.

Good Trading to you all.

- Spydertrader [/B]

My threshold is having a repeatable and tradable signal sequence, I think I got it. Then again maybe this threshold is too low for somebody else standard but it's good enough for me. I have no guidance to offer except my own progress. I don't feel any temptation to skip ahead because this will be lifelong pursuit.

 

[Avi 8]

The following was written in March:

Quote from Spydertrader:

Does the market know you traded real money vs SIM? Of course it doesn't. Only you do. Altering your decisions based on having real money in the market is a direct cause of focusing on your P & L or entry / exit points. Stay focused on the market and concern yourself with proper execution. When you do, you'll notice nothing changes.

The psychological aspects of having real money on the line only gain importance when the trader places emphasis on it. Scientific studies have shown the brain cannot tell the difference when an olympic athlete 'visualizes' performing at their sport compared to actually participating in the sport. The same synapses fire off. Don't allow fear and greed to enter the equation, and you can avoid most of the self created hurdles other traders face.

- Spydertrader

 

[Spydertrader]

The Tic Chart

As we move into the August portion of the syllabus, we begin our study of our final tool for these methods - the tic chart. As the DOM before it, and the STR / SQU before that, The Tic Chart represents an Intra-bar tool (the scalpel and scissors) far removed from the sledgehammer and the pick axe learned in the beginning months of this journal. The Tic chart provides the trader the ability to see the signal for change almost as it occurs in real time. In other words, the trader can now 'see' change and act upon it - almost to the very tic at which the signal for change occurred.

In order to learn to 'see' this change take place, one must configure their Tic Charts accordingly. The best way to 'see' the Tic changes is to use a "One-Tic Range" chart. In addition, you want to set the color changes of these 'one tic range bars' so a tic up creates a black Price and Volume bar and a tic down creates a red Price and Volume bar. Be sure to set the 'no change' value to a neutral color (in an effort to remove any bias from the chart itself). In such a fashion, you'll be able to see both the Price changes and the Volume changes which occur at the tic level. Quotetracker works quite well for this task. Unfortunately, the folks over at Qcharts haven't been nearly as helpful (I'm sure Ezzy can elaborate here). So, for those of us still using Qcharts, The Medved's (Quotetracker) have an excellent platform for viewing the 'one tic range' charts - including Volume.

Now, a bit of background ...

As pointed out in a previous post, we can use tic charts in combination with other tools as a means to create comfort and confidence in the signals we receive. A trader can use STR / SQU, DOM and Tic Charts - in combination - to learn to 'see' the sequences which repeat over and over again in the market each day. In this manner, these tools become more of a training tool - used by the trader to develop the mental pathways needed to 'see' what must come next. In addition, a trader can use the combination of tools to 'confirm' a signal after entering into a position. Lastly, a trader can use different parts of the tic charts to look for signals of continuation and change.

"O.K. Great, but what are we supposed to look for and how do we use the tic chart?"

One need look no further than the hand drawn chart posted above to locate the classic signal for change as represented by the Price portion of the tic chart. However, Volume also plays an important role in the tic chart. Remember Gaussians? Well, they too exist at the tic level, and one can 'see' the Gaussian shifts occur within the ES five minute bar, simply by monitoring the Volume pane of a 'one tic range' chart. In other words, When a shift in market sentiment occurs, this sentiment shift is visible on the tic chart itself. Pretty cool, eh? Harmonics, Gaussians, Channels all exist within the 'one tic range' chart. Now, I'm not trying to suggest one attempt to draw trendlines on a fast moving chart like this, but if one has developed the ability to mentally 'superimpose' a trend channel onto the tic chart, you'll understand exactly what I am talking about.

Here is how you need to go about learning to use this tool. First, spend a few days, maybe a week or two, simply monitoring the tic chart throughout the day. Get to know how the ebb and flow of the market materializes at the tic level. Make note of how the Gaussian formation develop and change when sentiment changes. Note how price enters and leaves various market formations (hitch, dip, stall, HVS etc.). Pay special attention to the sequences of events which occur with the STR / SQU, DOM and Tic chart.

After spending some time learning how the tool functions, then place it into the list of tools to use throughout the trading day. As with other Intra-bar tools, one can receive multiple signals within the same five minute ES bar (during periods of extreme volume). Keep in mind what signals correspond to your individual resolution level. Begin with the ES, and sweep through the various data sets in an effort to locate the signals for continuation and change which exist on all monitoring tools.

While I am sure many will have questions with respect to what the tic charts tell them, by monitoring both the ES and the YM tic charts for a while, looking for the information pointed out above, I'm confident most will find the charts an invaluable addition to their trading toolbox.

As we move forward in the month, I plan to post some examples of these points of change.

Good Trading to you all.

- Spydertrader