Jack Hershey – MACD and Stochastics helpers for 123 and FTT's

OK, but don't tell me then I didn't try.

 

Hello,

This is the first time I read about stock (rocket) trading, is it true that we only trade long?

Thank you.
ER

 

http://www.elitetrader.com/vb/showthread.php?s=&postid=218175#post218175

03-12-03 06:21 PM

Okay i am doing these in bursts as time premits.

Lets set up he MACD for Tampa.

Don't use any signals between +1 and -1 on the 5 min. Don't use the 1 min for anything for a while.

divide the MACD signals into two groups: "entwined" and combos of convergence, xo (crossover), divergence all outside the +1 to -1 tapeout.

"entwined" inside +1/-1 (+/-1) count as congestion, convergence and centing. When centering occurs i will get you in but that comes later.

"entwining" outside of +/-1 is an "away" trend. All trends are tradable. The further "away" the stronger the money velocity.

Exit on divergence out of "entwining" as long as it is to the +/-1 tape. This makes the fast line "inside" (nearer) 0. If there is just an offset, stay in the trade.

Okay now for the sequence : convergence, xo, and divergence.
as you see this, reverse. You are AWAY (greater than +/-1 on the 5 min. Youcan choose to reverse as fast line gets most away (peak or trough), next when convergence starts, next when xo, next when divergence. I don't care for now. The rule is wait until you are comfortable. My rule is "make money".

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.

My first try with Tamps to boost his money velocity was to make him and "iceberg" intermediate. This present attempt is the same thing using MACD on slower fractals.

What I am trying to do is this: He doesn't go for Stoc rockets; he has a hair trigger on MACD 1 min which is exit oriented from loosing in the past. I need to make him back a lot of lost money in the past. This is to get an even keel in the picture. Once we get past hair trigger exits, we make money.

See how the point 3 thing worked for some people here. There was a feeling that they could focus on do9ing something that distracted them from hair trigger exits. It was finding the trend. getting points 1,2,3 allow you to see a trend.

I showed hoe the volume pick up took you back into making money. I repeated it again to do the "two step" on point 3. THe airplane takeoff axample.

Here we are looking at several days of world conditions being a steady drag on the equities markets which reflect into the day trading ranges of the futures indexes.

We trade several times a day and we don't care about the world. BUT by looking at the longer duration fractals, we can relax and enjoy the trip.

this does bring up protctive stops. and it does bring up calibrating the absolute type indicators and their signals.

So be it. we can do what is required anythime something comes up. you will get the picture soon enough that all things lead to a KISS operation through one simple consideration: you know what you are doing and it is simple. It is the "I don't know what he's talking about" that appears just before you do "know what he's talking about" and it is very easy at that point, kind of feeling that you constantly have. I know tough sentence to read.

We are just moving up a little in intellectual thought bites. I'm the type of person that people request a continuation of classes after graduation so they can finish up a few things. It turns out you never do get finished.

Lets make some money here. hang in there longer on your trades.

For beginner rocket traders, you can sneak up to the 15 to not exit quite so soon if you have already doubled your money.

For disciplined rocket beginners, who have doubled, you can do 2 contracts now.

alian there is little congestion for you to revese and slalom innoa days. make a note of that.

Note that the deterioration of world conditions even further is taking a lot of the normal congestion out of the mid day.

When you see Bush play the religion card, you can expect the trump card to come from the other side as it did on Monday in Egypt where the scholars operate.

The econometric model on all of this is devistating. Not many academic web sites are current on this stuff as yet. (Footnote: I have done econometric modelling for the top ops starting over 40 years ago)

 

--------------------------------------------------------------------------------
Quote from tampa:

Jack,

...what happened to the "tampa fix"?
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Trend Paces.

After starting with an trading basis composed of several tenants to assure continuing capital appreciation, the tasks expand as proficiency is attained.

For those who are used to a return in their investments based on prior experience, two tasks appear: learning about this approach and integrating the appropriate parts into your existing performing system.

Where we are headed is in the beginning of the journal. Where we are is getting down about four of five things a week as time progresses.

Recently we added a measure to handle the difficulty involved with staying in a trade longer to be able to derive more profits. This involved finding three points to establish the trend channel. Point 1 is usually in the prior formation (comes first in time) and point 2 tends to define the width and volatility of the channel. Finally point 3 shows up on the same side (right side of the forming channel) as point 1. Points 1 and 3 form the side of the channel from which, at the end of the trend, a breakout (BO) will occur. We will no use this to exit the trade if at all possible since this point is not the point of maximum profit; it is just the end of the trend.

Having this basis established we can make use of the situation. First, we see it as a beginning and second we must be prepared to modify it one particular way. Trends begin as Break Outs (BO’s) of prior price formations. The initial period is very significant and it is not perfectly sustainable. This surge settles down somewhat in almost all cases. We can use this knowledge to make one adjustment it turns out.

We do this by setting a new point 3 when called for after the initial period of the BO. Think of an airplane taking off. It climbs steeply at a relatively low velocity. As velocity is attained the angle of the climb is lowered for the rest of the length of the haul to the assigned flight altitude. This is a two step process. The initial channel is adjusted the same way to attain the trend channel width. It is a little wider and it slopes less in money velocity.

What has occurred is that we have gotten the market pace for the trend established. And we can take the flight more comfortably.

Initially I have delt with this to help people stay in trades. To get them past the place in time where they look very diligently for the answer to the question “What’s wrong here?” What is wrong is nothing and a trend is making point 3. This occurs on the first decline of volume in the trend. The lesser volume affects the momentum of the BO. When the passing time occurs, people think and think hard, then they begin to act again. The trend moves along with the price then traversing the established channel. A micro cycle of A/D has occurred in this interval. (A/D is accumulation /distribution, the buyer/ seller market control thing).

The adjustment of the point 3 that then comes up after the price bumps off the left side of the channel, is a repition of the above just later in time. By knowing and watching and adjusting, you yourself are calibrated as well to making profits more effectively. Ithappens to be that nature of ET to have a predominant flavor of very short trades , often several within a trend. This is a kind of thing that glues a person efforts together ( A sort of need to be doing something at all times.)

The best thing to do passing time is to log protective stops from price formations.
We will get to that. I choose to focus on making money for the time being and we will get to lesser goals later.

Main Point.

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.

You can see the Stoc, MACD, volume and price give you identical sequences as before. So there is nothing to learn except to relax.

Yesterday this takes you through most of the day from beginning to end.

Big Point.

Also from now on make your channels interday ones when possible. We are day trading; we get out at the end of the day for one reason: our margin requirement is ½ that of position trading. There is a major reason as you all know.

We can resume our trade the next day using our prior knowledge and practices

 

I have only just seen your posting. I am sorry I don't trade stocks so I can't really answer your question. I see no reason for not trading the short side.

 

Here's part of Jack's post on Jan. 06 2008
...There is also an example of this which is the mirror image. We do not concern ourselves with this mirror since a stock in the mirror state cannot make the list for trading purposes...

so I just assumed...

 

As I understand it, rockets and icebergs are not part of the equity trading method.

 

Oh, I guess I mixed thing up.

 

Hi all,

Just a question about the settings in quotetracker.

For the stochastics in QT I can only fill out 2 variables. So basically my fast stoch (FST) says (14,3) and the slow stoch says (5,3).

How do other have this? I have the feeling something is wrong with my settings. How does one use the stochastics in QT using the correct settings?

regards,
Ivo

 

There is a Full Stochastic in QT. You have to use that.