Spydertrader's Jack Hershey Futures Trading Journal
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My ES for today.
I had an "ahh-haa" moment within the last week and wanted to share. FWIW, here are some notes from my journey thus far.
I have been studying the JH method for about 10 months now. I have been annotating the ES real-time on a regular basis since about May. When I first started out, I was annotating the ES and using only PV. I seemed to do pretty good, so I thought I was ready for more tools. But as I kept piling on additional tools thinking they would help me, I was not making the progress I wanted. In fact some of you that know me, I developed some pretty elaborate Excel VBA models that would automatically draw gausians and channels among other things. It seemed the more complex I made it, the more stagnated I became. So about 6 weeks ago, I went back to the ES and PV only. I would watch the YM occasionally, but my primary guide was the ES 5-min chart and calculating PV in my head! We're talking just the basics here. In addition, I started trading equities again (in addition to options which I have been trading for some time now which is my primary source of income). For the equities, I use daily channels and gausians. I am doing about 15 to 20 charts a day and have been for the last 6-weeks or so. I estimate that I have annotated well over 1,000 charts by now.
Anyhow, something happened when I went back to the basics. I started to "see" things in a different light. I don't know how else to describe it. While I am not trading the ES with real money yet, I really would not have a problem doing so now. I will continue to annotate charts up the wazu, because it is the one thing that I can point to that has helped me the most. Also trading equities too (for real) is also a help (its more or less the same thing in slow motion).
I hope some of you find this helpful. Have a great weekend everyone
I had an "ahh-haa" moment within the last week and wanted to share. FWIW, here are some notes from my journey thus far.
I have been studying the JH method for about 10 months now. I have been annotating the ES real-time on a regular basis since about May. When I first started out, I was annotating the ES and using only PV. I seemed to do pretty good, so I thought I was ready for more tools. But as I kept piling on additional tools thinking they would help me, I was not making the progress I wanted. In fact some of you that know me, I developed some pretty elaborate Excel VBA models that would automatically draw gausians and channels among other things. It seemed the more complex I made it, the more stagnated I became. So about 6 weeks ago, I went back to the ES and PV only. I would watch the YM occasionally, but my primary guide was the ES 5-min chart and calculating PV in my head! We're talking just the basics here. In addition, I started trading equities again (in addition to options which I have been trading for some time now which is my primary source of income). For the equities, I use daily channels and gausians. I am doing about 15 to 20 charts a day and have been for the last 6-weeks or so. I estimate that I have annotated well over 1,000 charts by now.
Anyhow, something happened when I went back to the basics. I started to "see" things in a different light. I don't know how else to describe it. While I am not trading the ES with real money yet, I really would not have a problem doing so now. I will continue to annotate charts up the wazu, because it is the one thing that I can point to that has helped me the most. Also trading equities too (for real) is also a help (its more or less the same thing in slow motion).
I hope some of you find this helpful. Have a great weekend everyone
I have my 'pages' set to 40 posts per page. As a result, I do not have 856 pages, so a link to your post, or a screen shot of the exact bars referenced would help a great deal. Until then, maybe this will help (maybe it won't, but I hope it does).
A Pennant forms on decreasing Volume. As a result, the second bar in the Pennant Formation, often has significantly lower Volume than the previous bar. As such, it becomes very difficult for the subsequent bar to not show increasing Volume of the Pennant Formation Second (or subsequent, if the formation has more than 2) Bar. Why care about Pennants? Ask yourself what for sure constitutes change. Every time, without a doubt, you can always see it, never a mistake change. Draw it out on a piece of paper. Now, how do Pennants differ from this "yes, I damn well do know it" example of change?
If it helps, draw out an example of continuation (Every time, without a doubt, you can always see it, never a mistake ) bar by bar. Then draw the change example. At some point, you have to know you have change after continuation. What is that point? I am not speaking about FTT's or FBO's or any 'vocabulary' words. What tells you when you monitor that you have change?
Pennants provide the time where we, as traders, can gather our thoughts and determine what must happen next.
At some point in a developing bar, price sits at a point in time where only certain things can occur next. As time passes, and the market eliminates possibilities we eventually arrive at a point in time where only one thing remains. (We did this with Flaws a while back) At some point in time (before we reach the 'one thing' moment), even the several remaining possibilities mean the same thing - either continuation or change.
It is here, where we take action.
By example, consider holding a short position in a down channel. Price heads lower rapidly stopping just before the LTL, and then, Price comes up slightly (2 or 3 tics) off the low after bouncing off a smallish DOM wall (you might not even have seen the wall or even use the DOM as a tool - doesn't matter). You begin to think, "Hmmmmmm. Possible FTT right here. Did I miss something? Is this just normal Intra-bar volatility?" Before you can sort out the answers, the bar closes and the next bar opens inside the previous bar. Of course, its color flips between black and red, creating all sorts of stress, and about every other second, the Price bar starts to look like one of them there Doji Star thing-a-ma-bobs. Over time you notice that Price 'seems' to spend more time red than black. You remember the 'Formations discussion' and think, "OK, Sym Pennant, so I wait."
Before you can even arrive at continuation or change, Price must transition (even if for only a brief moment) to an FTP or an FBP before you can have a for sure change event. Jack has talked about this many times with his 'market Matrix' discussions. The market cannot jump around. It does not ever (OK, I did see this once on February 27, 2007, but that was surely an extreme day) run super fast in one direction, and then, come to a screeching halt. The market transitions from one mode to the next, so segment it off, and then, look for the signals. You already do this intuitively with channels.
Bottom line, if you can differentiate (now with the assistance of formations) between the market modes, you do not need to know when you have an FTT. You simply need to know continuation or change. Hence, next months discussion on "Additional Signals for Change" on the Syllabus. work through the formations first, and then, see if that doesn't help you to catch FTT's - even on the coarse level. Later, you'll be able to watch the YM for your 'signal for change' and know (in advance) the direction of the ES formation BO.
Really cool stuff.
- Spydertrader
Bingo.
- Spydertrader
The exact same thing happened to me. I started my journey on Feb 1 and have been trading live since May 1. I suffered from the Hershey disorder called Analysis Paralysis. I was a junkie for additional tools. Then about 6 weeks ago as well after coming out of denial and admitting my problem. I begin to think of a solution. And the only thing I could think of was go back to basics and try to simplify my decision process. As a result, I use ES P/V 95% and DOM (because I really have no choice it has to be up) 5%.
By no means I'm even close to SCT (I don't even think I ever reversed a position yet) but I do pick my spots wisely. I trade what I know, not what I don't know.
F***!. What else can I say.
I have seen these annotations in your charts and never realized what they signified. I just assumed you were taking a shortcut to annotate a B2B followed by a B2R.
<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1614898">
I cannot count how many items during my gaussian annotations have I had a B2B followed a increasing R and could not figure out how to annotate it (and the opposite as well).
I realize what I was seeing (but not really understanding)
Thanks for the post
I have seen these annotations in your charts and never realized what they signified. I just assumed you were taking a shortcut to annotate a B2B followed by a B2R.
<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=1614898">
I cannot count how many items during my gaussian annotations have I had a B2B followed a increasing R and could not figure out how to annotate it (and the opposite as well).
I realize what I was seeing (but not really understanding)
Thanks for the post
lol.. it is ironic that quite a few of us that have been here for the long haul have reverted back to the basics. I recall on about 97 occasions Spyder saying how harmful it would be to take on finer tools before you were ready. I guess sometimes you just have to figure that out on your own, although after all these a-ha's I have been having, Im certain I can go back and pinpoint a post from ST early on in the journal that would have saved me months of headache..... Im just going to go ahead and believe whatever he says now
The tick chart that you see, is the only one the data provider was offering till now, that I knew of.
I am able to see the 2 pair very clear on it.
What you don't see in the videos is, I am running more data on two other screens.
I do have the ES tic, the YM DOM, the 5, 10, 30, 60, and daily charts of both in a tab, as to switch off as to what is needed.
Also, a line chart is added of the ES and YM that simplifies the channels without the bars being involved. It is great to just see the trends so clear with just a simple line chart and channels.
As far as the tick, I use both , but I tend to watch the YM very close at points I feel are important.
Often I will see the 2 pair move first there ( YM ), then I look to see if the ES is following in price.
Toggle of red - black, toggle of price bar.
Watch the dynamic close of a bar as it toggles.
Does it toggle up against resistance? or does it toggle towards support?
Is there a bar close by that the high , low, open or close, look to be the support or resistance, that is causing the dynamic close to toggle against?
You might notice I often run a horizontal line from a previous bar, because I see that as the S/R that affects the current bar.
I keep that line there until it has held or been broken.
I use that to help in flaws, to identify how strong a pullback may be, which can be used to help myself, to identify an ftt from a flaw.
As for myself , I don't know if I could forward every thought I have while trading, as to why I did what. There is a huge amount of very quick thinking that goes on. One day , I hope not to think.
I can say that I studied music for a good part of my life.
I had many instructors drill me with NOTES, SCALES, CHORDS, and MODES.
Over and over I had been drilled these lessons, and when I couldn't stand it , all over again with a new instructor doing the same thing , but for a different style of music.
One thing I can definitely say, all of those lessons never brought music out, from inside.
MUSIC , that came from taking all I had learned and drilled in my head . . .
And completely forgetting it all and just PLAYING!
I just let the music flow naturally, and did not think anymore.
Big Thanks to Spyder, Jack, Bundlemaker for their generosity.
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