The Documents by Jack Hershey
- Thread starter TIKITRADER
- Start date
as in How to know you are learning something wrong or that is incorrect
Break what you are doing down into pieces and find the pieces that are difficult. Look at why you are making them difficult. Most times it is a belief you already have that will not fit into the assembly line of getting to differentiation.
the mind cannot erase. It can but you have to train your mind to manufacture the eraser peptides, etc. and that takes training and a long application of time for doing subsequent erasing.
A lot of people are screwed regarding this. Read detractors to pick out their fatal beliefs.
Keep in mind, someday, you probably will be standing on the shoulders of those who preceded you (See spydertrader as an example).
Next, as you work, the drills you are doing do not work for you. you may be "inventing" or you may be "skipping steps" because you know you are so smart. Please stop inventing and please stop working so rapidly that you do not give yourself a chance.
Next, look at how the helix works. everything you HAVE learned isstill in play, you are not replacing anything with something else. think a about how you learned math and science. you start with a foundation and add building blocks. No blocks areskippped or misplaced or left out.
Next, review how Rome was built. It took more than one day. you assess. You assimilate, you get facility. you can actually talk about it a little. you can pass it forward to others.
Here is an important point. you will learn more during your passing it forward than any other time. don't be a solo artist, ever. Work with peers and work with your mentor and work to learn to mentor.
The first person to mentor is yourself. so talk out loud as you do drills and work in real market time.
Next, always have the "context" in mind. It surrounds you on two sides in terms of fractals. You are building a tank tread in your mind. No moibus strips please.
Please recognize the three tank treads one within the other. We trade on the middle one. The pattern must be unconsciously competent on all three levels. Think of Rome, again.
Next, this is not an academic situation. You can always look at others papers and be a copycat. TThicken your 3 ring binder's past contents by repeating drills to brush more frequently. Use more toothpaste than your older brother or sister. Make your mother use you as an example.
next, at the END of everywork session (drill) debrief and point out to yourself the things you had to do workaround on before you could bury a past belief. We all are building new pieces INFRONT OF OLD UNUSEFUL PIECES.
Next, ask thoughtful questions. See rcgarcia as an example not to follow. What did I do wrong? is not a thoughtful question. It is facing the wrong way and you are asking for your homework to be graded. The market is always correct. so ask about what the market is doing and how a person can see the "what's" that are going on.
If you are annotaing add a log to help you. this is building a permanent answer sheet for the annotations on three levels. all the pieces have their own columns and their own vocabularies. This way nothing is getting skipped or invented.
Next: reflection. "No shit, dick tracey" can happen after you sleep on anything. What happened was that your unconscious sensing got added into your memory banks and this is like putting reinforcing rods in just after you pour the cement. This is where aha's come from.
Wrapup. When you work hard drilling, you get to deal with mistakes. When the light appears at the end of the tunnel on a dril,l you find out by checking yourself at below the neck level. You feel comfort, support and confidence and anxiety, fear and anger have gone way away.
Look back at your past successes in completing drills. Do not postpone doing sufficient drills.
There are a lot of people doing this. There are a lot of people passing it forward. Most people pass on doing the work. Learning is a process.
Break what you are doing down into pieces and find the pieces that are difficult. Look at why you are making them difficult. Most times it is a belief you already have that will not fit into the assembly line of getting to differentiation.
the mind cannot erase. It can but you have to train your mind to manufacture the eraser peptides, etc. and that takes training and a long application of time for doing subsequent erasing.
A lot of people are screwed regarding this. Read detractors to pick out their fatal beliefs.
Keep in mind, someday, you probably will be standing on the shoulders of those who preceded you (See spydertrader as an example).
Next, as you work, the drills you are doing do not work for you. you may be "inventing" or you may be "skipping steps" because you know you are so smart. Please stop inventing and please stop working so rapidly that you do not give yourself a chance.
Next, look at how the helix works. everything you HAVE learned isstill in play, you are not replacing anything with something else. think a about how you learned math and science. you start with a foundation and add building blocks. No blocks areskippped or misplaced or left out.
Next, review how Rome was built. It took more than one day. you assess. You assimilate, you get facility. you can actually talk about it a little. you can pass it forward to others.
Here is an important point. you will learn more during your passing it forward than any other time. don't be a solo artist, ever. Work with peers and work with your mentor and work to learn to mentor.
The first person to mentor is yourself. so talk out loud as you do drills and work in real market time.
Next, always have the "context" in mind. It surrounds you on two sides in terms of fractals. You are building a tank tread in your mind. No moibus strips please.
Please recognize the three tank treads one within the other. We trade on the middle one. The pattern must be unconsciously competent on all three levels. Think of Rome, again.
Next, this is not an academic situation. You can always look at others papers and be a copycat. TThicken your 3 ring binder's past contents by repeating drills to brush more frequently. Use more toothpaste than your older brother or sister. Make your mother use you as an example.
next, at the END of everywork session (drill) debrief and point out to yourself the things you had to do workaround on before you could bury a past belief. We all are building new pieces INFRONT OF OLD UNUSEFUL PIECES.
Next, ask thoughtful questions. See rcgarcia as an example not to follow. What did I do wrong? is not a thoughtful question. It is facing the wrong way and you are asking for your homework to be graded. The market is always correct. so ask about what the market is doing and how a person can see the "what's" that are going on.
If you are annotaing add a log to help you. this is building a permanent answer sheet for the annotations on three levels. all the pieces have their own columns and their own vocabularies. This way nothing is getting skipped or invented.
Next: reflection. "No shit, dick tracey" can happen after you sleep on anything. What happened was that your unconscious sensing got added into your memory banks and this is like putting reinforcing rods in just after you pour the cement. This is where aha's come from.
Wrapup. When you work hard drilling, you get to deal with mistakes. When the light appears at the end of the tunnel on a dril,l you find out by checking yourself at below the neck level. You feel comfort, support and confidence and anxiety, fear and anger have gone way away.
Look back at your past successes in completing drills. Do not postpone doing sufficient drills.
There are a lot of people doing this. There are a lot of people passing it forward. Most people pass on doing the work. Learning is a process.
Building Minds for Building Wealth
Summary
This paper is an abbreviated presentation of what it takes, pragmatically, for a person to
make money by position trading stocks and Seamless Continuous Trading (SCT) of the S&P
500 E-mini (ES) futures. It tells how a person can get to the point of making significant
inroads on achieving their potential. Markets are there for anyone to use, and any person
has the potential to enable themselves to perform by using obtainable knowledge, skills and
experience.
Some good choices are required. Then, with these choices made, a person must go
through a holistic process of refinement to become an expert. It all boils down to defining
and completing a process. The objective is to form a working partnership with the market.
To do this, starting from an understood beginning point, it is necessary to become
operational in several related areas concurrently. The process allows a person to realize a
potential that is already there, by going from level to level towards an operational goal.
Getting there is a process. It is more than just looking at what is. It is also a process of
acquisition and a process of using learning tools to build structure and new processes. All
the while, energy must be supplied to make the construct work, function, and refine itâs self.
This paper is organized to unwrap and place upon the table the opportunity and, then, to go
about the business of systematically getting it to work, by an effort of transference.
i.e. to make money as a consequence of âtakingâ the opportunity.
The text of this paper is written in the vein of me, the author, talking to you, the recipient of
the transference.
JH
Summary
This paper is an abbreviated presentation of what it takes, pragmatically, for a person to
make money by position trading stocks and Seamless Continuous Trading (SCT) of the S&P
500 E-mini (ES) futures. It tells how a person can get to the point of making significant
inroads on achieving their potential. Markets are there for anyone to use, and any person
has the potential to enable themselves to perform by using obtainable knowledge, skills and
experience.
Some good choices are required. Then, with these choices made, a person must go
through a holistic process of refinement to become an expert. It all boils down to defining
and completing a process. The objective is to form a working partnership with the market.
To do this, starting from an understood beginning point, it is necessary to become
operational in several related areas concurrently. The process allows a person to realize a
potential that is already there, by going from level to level towards an operational goal.
Getting there is a process. It is more than just looking at what is. It is also a process of
acquisition and a process of using learning tools to build structure and new processes. All
the while, energy must be supplied to make the construct work, function, and refine itâs self.
This paper is organized to unwrap and place upon the table the opportunity and, then, to go
about the business of systematically getting it to work, by an effort of transference.
i.e. to make money as a consequence of âtakingâ the opportunity.
The text of this paper is written in the vein of me, the author, talking to you, the recipient of
the transference.
JH
Now Jem, don't be so cynical. Just because for all the years Jack has been mentoring none of his scores of followers has ever posted "Yippee! I just got filthy fucking rich!" doesn't mean nobody has.
I will continue to post each section of Building Minds for Building Wealth. As the weeks pass this will give an opportunity for anyone with questions or knowledge to share, a place to discuss the content.
Now on to . . .
Part I The Macro: Game Plans, Incentives and Confidence
If you donât know where you are going you donât need a map. We all are going, by
transference, to a place where you make as much money as you want. This amount of
money is much more than you need.
The Game Plan, your map, is based upon your trading business plan which is THE incentive
for going to the place to make money. The trading business plan starts with your present
capital and includes 8 levels of doubling, the effectiveness of your performance as
compared to your beginning performance level. There are two caveats you will have to
include in your plan; how times will change in terms of the worth of money, and the
possibility that you may have done some of these doublings already, if you are not a novice
currently.
There are two other parts to this Game Plan: the markets and YOU. The markets are there
now, offering money, and YOU are reading this in your present state of existence. By
connecting you to the markets and enabling you, your business plan (wealth building) will
become a matter of record over time.
Confidence will come to you during this endeavor. It comes from your mind as you build
your mind, successfully, to take advantage of the opportunity.
The markets operate in ways that are wholly documented. They are known quantities and
they give money to those who use them, correctly, for such purposes. We all, as users,
âtakeâ what we are able to as a direct consequence of our knowledge, skills and experience.
The markets are there offering; we are here with given expertise.
This paper deals with clarifying the methods, by being effective and efficient, that can be used deliberatively to
take the offered money out of the market and put it into your hands as a trader.
Once the game plan is clear, an iterative refinement process ensues to afford you, a trader,
the 8 doublings of performance for taking that money out of the market.
The above, scopes and bounds the opportunity and the process necessary to go from the
NOW to the place where you, as a trader, are able to realize what the market offers to you
at all times.
Acceptable stocks have price rates of change that are seen to be in the range of 5 percent
per day. The ES typically moves in a range of 15 points a day. Any person can see this
happen, have a plan to make money from these price changes, and carry out an approach
to transfer this capital dynamic from the traded markets into a personal trading account.
Public records that describe these three elements abound. This paper is a description of
how to go about getting engaged in and carrying out that which is required to participate in
this process.
Now on to . . .
Part I The Macro: Game Plans, Incentives and Confidence
If you donât know where you are going you donât need a map. We all are going, by
transference, to a place where you make as much money as you want. This amount of
money is much more than you need.
The Game Plan, your map, is based upon your trading business plan which is THE incentive
for going to the place to make money. The trading business plan starts with your present
capital and includes 8 levels of doubling, the effectiveness of your performance as
compared to your beginning performance level. There are two caveats you will have to
include in your plan; how times will change in terms of the worth of money, and the
possibility that you may have done some of these doublings already, if you are not a novice
currently.
There are two other parts to this Game Plan: the markets and YOU. The markets are there
now, offering money, and YOU are reading this in your present state of existence. By
connecting you to the markets and enabling you, your business plan (wealth building) will
become a matter of record over time.
Confidence will come to you during this endeavor. It comes from your mind as you build
your mind, successfully, to take advantage of the opportunity.
The markets operate in ways that are wholly documented. They are known quantities and
they give money to those who use them, correctly, for such purposes. We all, as users,
âtakeâ what we are able to as a direct consequence of our knowledge, skills and experience.
The markets are there offering; we are here with given expertise.
This paper deals with clarifying the methods, by being effective and efficient, that can be used deliberatively to
take the offered money out of the market and put it into your hands as a trader.
Once the game plan is clear, an iterative refinement process ensues to afford you, a trader,
the 8 doublings of performance for taking that money out of the market.
The above, scopes and bounds the opportunity and the process necessary to go from the
NOW to the place where you, as a trader, are able to realize what the market offers to you
at all times.
Acceptable stocks have price rates of change that are seen to be in the range of 5 percent
per day. The ES typically moves in a range of 15 points a day. Any person can see this
happen, have a plan to make money from these price changes, and carry out an approach
to transfer this capital dynamic from the traded markets into a personal trading account.
Public records that describe these three elements abound. This paper is a description of
how to go about getting engaged in and carrying out that which is required to participate in
this process.
A. The Trading Business Plan
The overall game plan merges several factors. The trading business plan is more a
commentary on how the money part of this plan works. Later in Part II there is an emphasis
on trading plans and the trading methods used. In this section we will consider how all of
the details relate in the formal package, outlined in appendix B.
The trading business plan is designed and followed to achieve a critical path of building
capital as fast as possible, with due consideration to both financial and non-financial
aspects. Basically the critical path is determined by using all the knowledge, skills and
experience available at the first opportunity to deploy them to making money without undue
risk. It is especially important not to trade in those areas where knowledge and skills are
lacking.
The trading business plan develops around two learning stages. The first stage is related to
position trading stocks, where there is no financial leverage and the pace of the market
traded is relatively slow. Having a slow paced market, affords the beginning trader the time
to get the job done successfully because the time needed is always available. By not
leveraging capital, in stock trading, the impact of temporary failures or mistakes does not eat
up prior successes. Position trading stocks builds a foundation for moving into faster paced
markets where capital is ordinarily leveraged.
The two markets that will be used are very different in one major respect. Position trading
stocks is done in one general market (equities) where many instruments are traded
concurrently. In contrast, the commodities futures index market contains instruments for
trading and most traders focus on one instrument within that market.
While neither market is
continuous, in mathematical terms, position trading stocks is a continuous day after day
operation without end. Cycles of entries and exits are made over and over. In commodities
trading, the activity of the market focuses primarily on the front contract whose life span is
three months (a quarter) meaning that the front month is renewed quarterly with a fixed time
horizon, that is initially three months out. Thus, the future contract term continually shortens
after initiation until the term of the front contract is used up in a quarter of a year. The
purposes of the stock instruments are entirely different than the purpose of the commodities
futures index instruments. Stock instruments represent ownership in ongoing corporations,
while commodities contracts are financial risk insurance-like protection instruments related
to a limited value range in the future.
Making money in position stock trading happens much more slowly (10% every 4 to 8 days)
than in trading commodities futures indexes (up to 3 times the daily range, each day). On
the other hand, the stock markets are much larger and diverse than the commodities future
indexes. When a trader reaches a level of expertise in both markets and trades
concurrently, the normal procedure is to limit the capital in commodities futures index
trading. The limitation is set by giving regard to being able to trade in a very timely manner
without a fear of not having orders filled promptly. In this way âslippageâ is avoided. As
profits accumulate through compounding, and capital surpluses occur, they are transferred
periodically from the commodities future index trading accounts to the position stock trading
program accounts. At some point financial trading limitations do occur in stock position
trading. Because the traded universe is relatively broad, more and more streams of capital
are added and are traded in parallel.
The overall game plan merges several factors. The trading business plan is more a
commentary on how the money part of this plan works. Later in Part II there is an emphasis
on trading plans and the trading methods used. In this section we will consider how all of
the details relate in the formal package, outlined in appendix B.
The trading business plan is designed and followed to achieve a critical path of building
capital as fast as possible, with due consideration to both financial and non-financial
aspects. Basically the critical path is determined by using all the knowledge, skills and
experience available at the first opportunity to deploy them to making money without undue
risk. It is especially important not to trade in those areas where knowledge and skills are
lacking.
The trading business plan develops around two learning stages. The first stage is related to
position trading stocks, where there is no financial leverage and the pace of the market
traded is relatively slow. Having a slow paced market, affords the beginning trader the time
to get the job done successfully because the time needed is always available. By not
leveraging capital, in stock trading, the impact of temporary failures or mistakes does not eat
up prior successes. Position trading stocks builds a foundation for moving into faster paced
markets where capital is ordinarily leveraged.
The two markets that will be used are very different in one major respect. Position trading
stocks is done in one general market (equities) where many instruments are traded
concurrently. In contrast, the commodities futures index market contains instruments for
trading and most traders focus on one instrument within that market.
While neither market is
continuous, in mathematical terms, position trading stocks is a continuous day after day
operation without end. Cycles of entries and exits are made over and over. In commodities
trading, the activity of the market focuses primarily on the front contract whose life span is
three months (a quarter) meaning that the front month is renewed quarterly with a fixed time
horizon, that is initially three months out. Thus, the future contract term continually shortens
after initiation until the term of the front contract is used up in a quarter of a year. The
purposes of the stock instruments are entirely different than the purpose of the commodities
futures index instruments. Stock instruments represent ownership in ongoing corporations,
while commodities contracts are financial risk insurance-like protection instruments related
to a limited value range in the future.
Making money in position stock trading happens much more slowly (10% every 4 to 8 days)
than in trading commodities futures indexes (up to 3 times the daily range, each day). On
the other hand, the stock markets are much larger and diverse than the commodities future
indexes. When a trader reaches a level of expertise in both markets and trades
concurrently, the normal procedure is to limit the capital in commodities futures index
trading. The limitation is set by giving regard to being able to trade in a very timely manner
without a fear of not having orders filled promptly. In this way âslippageâ is avoided. As
profits accumulate through compounding, and capital surpluses occur, they are transferred
periodically from the commodities future index trading accounts to the position stock trading
program accounts. At some point financial trading limitations do occur in stock position
trading. Because the traded universe is relatively broad, more and more streams of capital
are added and are traded in parallel.
1. Position Trading Stocks
Position trading stocks is an approach that involves carrying out the process shown in the
chart on page 11. The left QA (Quality Assurance) part of the chart is designed to yield an
up to date Universe which then can be traded as an EOD (End of Day) data oriented effort.
The right side of the chart deals with the ROI (Return on Investment) performance
characteristics of making money by using this Universe of stocks.
The basic principal is to trade a very high quality Universe as measured by earnings and
price performance. Stocks are obtained nowadays from Stocktables.com and the default
setup for getting a list of approximately 125 stocks is done by setting limits on the RS
(Relative Strength) and EPS (Earnings per Share). The price range is arbitrarily set at 10 to
50. The list is sorted by increasing volume, to assure that the order of appearance of the
stocks corresponds to three scoring values going down the list from top to bottom (7âs, 0âs
and 1âs). Over time the stocks migrate up the list. The list can be pulled at the frequency of
every 3 to 4 days.
All stocks on the list are graded to determine their repeatability and reliability and
consequently their Rank which is a measure of the daily money velocity in percent per day.
An initial analysis sheet is used to do this, either manually (A good drill for getting to expert)
or automatically by Excel. The chart of the stock is also annotated with formations and
Initial Analysis Sheet (IAS) designations at this time.
Stocks are then placed in a set of review portfolios according to their contemporary scores
(7âs, 0âs, and 1âs), whether they are owned, and if they are being considered for purchase
(a HOT list).
Daily evaluations are made using logging sheets. The logging sheets represent monitoring,
analysis, decision making and timely action as the 16 columns are traversed. Logging
sheets are kept for each portfolio. Clearstation.com is an example of a place to keep
portfolios that can be accessed to do the daily routine in convenient bulk viewing groups.
All of the above is kept in three ring binders and, periodically, new annotated charts are
pulled from the displays used on the PC monitoring platform.
The Hot list and the owned lists are given special attention on a daily basis. A log sheet is
used to assess the HOT list and the daily analysis sheet is used to complete the monitoring,
analysis, decision making and planned action for the next day on owned stocks.
The progression of wealth building continually accelerates. There is no point where the
effort becomes saturated (as mold would as it grew on a piece of bread). The progression is
a consequence of the continuing acquisition of knowledge, skills and experience.
At some point, while also holding a job, EOD trading becomes the principal source of
acquired wealth. When this occurs it is time to consider trading full time. Monitoring stocks
full time, instead of just in the evening as an EOD effort, changes the effectiveness and
efficiency of making money by position trading. You move from EOD data to real time data
in a more revealing fractal (usually the 15 or 30 minute fractal). This means two things: you
get to see the actual peaks forming, and you can also consider changing the duration of the
hold period to only incorporate the period of highest money velocities.
Both considerations greatly increase the return on investment (ROI), and replacing the
income of not working usually happens over a short interval. Coupling this with the real time
commodities trading opportunity completes the full picture.
Trading stocks only during their optimum price velocities is called cross trading. It involves
emphasizing the money velocity of the hold period. As stocks are monitored in real time, it
is possible to rough out their time rate of change in value. This applies to owned stocks as
well as HOT list stocks. When an owned stock begins to wane in capital appreciation, it can
be sold and the capital can then be used to buy and hold a stock whose capital appreciation
is growing better than the just sold stock.
Position trading stocks is an approach that involves carrying out the process shown in the
chart on page 11. The left QA (Quality Assurance) part of the chart is designed to yield an
up to date Universe which then can be traded as an EOD (End of Day) data oriented effort.
The right side of the chart deals with the ROI (Return on Investment) performance
characteristics of making money by using this Universe of stocks.
The basic principal is to trade a very high quality Universe as measured by earnings and
price performance. Stocks are obtained nowadays from Stocktables.com and the default
setup for getting a list of approximately 125 stocks is done by setting limits on the RS
(Relative Strength) and EPS (Earnings per Share). The price range is arbitrarily set at 10 to
50. The list is sorted by increasing volume, to assure that the order of appearance of the
stocks corresponds to three scoring values going down the list from top to bottom (7âs, 0âs
and 1âs). Over time the stocks migrate up the list. The list can be pulled at the frequency of
every 3 to 4 days.
All stocks on the list are graded to determine their repeatability and reliability and
consequently their Rank which is a measure of the daily money velocity in percent per day.
An initial analysis sheet is used to do this, either manually (A good drill for getting to expert)
or automatically by Excel. The chart of the stock is also annotated with formations and
Initial Analysis Sheet (IAS) designations at this time.
Stocks are then placed in a set of review portfolios according to their contemporary scores
(7âs, 0âs, and 1âs), whether they are owned, and if they are being considered for purchase
(a HOT list).
Daily evaluations are made using logging sheets. The logging sheets represent monitoring,
analysis, decision making and timely action as the 16 columns are traversed. Logging
sheets are kept for each portfolio. Clearstation.com is an example of a place to keep
portfolios that can be accessed to do the daily routine in convenient bulk viewing groups.
All of the above is kept in three ring binders and, periodically, new annotated charts are
pulled from the displays used on the PC monitoring platform.
The Hot list and the owned lists are given special attention on a daily basis. A log sheet is
used to assess the HOT list and the daily analysis sheet is used to complete the monitoring,
analysis, decision making and planned action for the next day on owned stocks.
The progression of wealth building continually accelerates. There is no point where the
effort becomes saturated (as mold would as it grew on a piece of bread). The progression is
a consequence of the continuing acquisition of knowledge, skills and experience.
At some point, while also holding a job, EOD trading becomes the principal source of
acquired wealth. When this occurs it is time to consider trading full time. Monitoring stocks
full time, instead of just in the evening as an EOD effort, changes the effectiveness and
efficiency of making money by position trading. You move from EOD data to real time data
in a more revealing fractal (usually the 15 or 30 minute fractal). This means two things: you
get to see the actual peaks forming, and you can also consider changing the duration of the
hold period to only incorporate the period of highest money velocities.
Both considerations greatly increase the return on investment (ROI), and replacing the
income of not working usually happens over a short interval. Coupling this with the real time
commodities trading opportunity completes the full picture.
Trading stocks only during their optimum price velocities is called cross trading. It involves
emphasizing the money velocity of the hold period. As stocks are monitored in real time, it
is possible to rough out their time rate of change in value. This applies to owned stocks as
well as HOT list stocks. When an owned stock begins to wane in capital appreciation, it can
be sold and the capital can then be used to buy and hold a stock whose capital appreciation
is growing better than the just sold stock.