JACK HERSHEY METHOD EXPOSED AS FRAUD! *Debated*

Discussion in 'Automated Trading' started by bwolinsky, Dec 13, 2008.

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  1. I guess not, but I think I remember something later in the thread where they changed it to that. Let me check.
     
    #241     Dec 17, 2008
  2. This is their current version in EasyLanguage


    {
    CashCow automated trading system
    Architect: Jack Hershey
    Version 0.3
    12 Dec 2008
    New functionality: Context Supression Logic. Diagnostic Module.
    New enhancements: Better organized code structure for natural reading.
    Bug fixes: none
    }

    //Data Module
    variables:
    Stoch5FastK( 0 ), Stoch5FastD( 0 ), Stoch5SlowK( 0 ), Stoch5SlowD( 0 ),
    Stoch14FastK( 0 ), Stoch14FastD( 0 ), Stoch14SlowK( 0 ), Stoch14SlowD( 0 ),
    MACDVal( 0 ), MACDMA( 0 ), MACDDiff( 0 ),
    TimeOK(False),
    VolumeOK(False),
    CurrentbarOK(False),
    LongOK(False),
    ShortOK(False),
    DateOK(False);

    //Formula Module

    Value1 = Stochastic( H, L, C, 5, 2, 3, 1, Stoch5FastK, Stoch5FastD, Stoch5SlowK, Stoch5SlowD ) ;



    Value2 = Stochastic( H, L, C, 14, 1, 3, 1,
    Stoch14FastK, Stoch14FastD, Stoch14SlowK, Stoch14SlowD ) ;



    MACDVal = MACD( Close, 5, 13 ) ;
    MACDMA = XAverage( MACDVal, 6 ) ;
    MACDDiff = MACDVal - MACDMA ;

    //Context Supression Logic
    if Time > 945 and Time < 1600 then TimeOK = True else TimeOK = False;


    if Volume of 1 bar ago > 20000 then VolumeOK = True else VolumeOK = False;


    if currentbar > 2 then CurrentbarOK = True else CurrentbarOK = False;


    if MACDDiff > 0 then LongOK = true else LongOK = false; //Needs to be validated and then tuned.

    This is another condition that needs to be added. The MACD>than it's signal line


    if MACDDiff < 0 then ShortOK = true else ShortOK = false; //Needs to be validated and then tuned.

    Another, MACD<smamacd

    Julian dates, not sure what the conversion is, apparently only for testing
    if date = 1081210 then DateOK = true else DateOK = false; //Only used during testing phase.

    if CurrentBarOK and TimeOK and DateOK then
    begin

    If all those

    //Entry Logic
    if VolumeOK then //enter only when volume greater than 'Medium'
    begin
    if LongOK and Stoch5FastK crosses above 50 and Stoch5FastK > Stoch5FastD and marketposition = 0 then
    Buy ( "S5FKLE" ) 1 contract this bar at close ;



    if ShortOK and Stoch5FastK crosses below 50 and Stoch5FastK < Stoch5FastD and marketposition = 0 then


    Sellshort ( "S5FKSE" ) 1 contract this bar at close ;
    end;

    //Reverse logic
    If VolumeOK then
    begin


    if ShortOK and marketposition > 0 and Stoch5FastK crosses below 50 then

    sellshort ( "S5FKRS" ) 1 contracts this bar at close ;


    if LongOK and marketposition < 0 and Stoch5FastK crosses above 50 then
    buy ( "S5FKRL" ) 1 contracts this bar at close ;
    end;

    //Exit Logic



    { Hold Logic. Tee up stub for later.


    if absvalue( MACDVal ) < 1.4 then }
    if {(Stoch14SlowK < Stoch14SlowD) and} (Stoch14SlowK crosses below 80) and marketposition > 0 then
    Sell ( "S14SKLX" ) 1 contract this bar at close ;

    if {(Stoch14SlowK > Stoch14SlowD) and} (Stoch14SlowK crosses above 20) and marketposition < 0 then
    buytocover ( "S14SKSX" ) 1 contract this bar at close ;

    if marketposition > 0 and Stoch14SlowK crosses below Stoch14SlowD then
    sell ( "S14KDLX" ) 1 contract this bar at close ;

    if marketposition < 0 and Stoch14SlowK crosses above Stoch14SlowD then
    buytocover ( "S14KDSX" ) 1 contract this bar at close ;

    if marketposition > 0 and Stoch5FastK crosses below 50 then
    sell ( "S5FKSX" ) 1 contracts this bar at close ;

    if marketposition < 0 and Stoch5FastK crosses above 50 then
    buytocover ( "S5FKLX" ) 1 contracts this bar at close ;

    //Diagnostic Module
    {Remove brackets and define date to enable.
    if date = 1081210 then
    Print(File("c:\log.txt"), time, Stoch5FastK, Stoch5FastD, Stoch5SlowK, Stoch5SlowD,
    Stoch14FastK, Stoch14FastD, Stoch14SlowK, Stoch14SlowD,
    MACDVal, MACDMA, MACDDiff, " ",Volume[0]);

    if date = 1081210 then
    Print(Stoch5FastK, Stoch5FastD, Stoch5SlowK, Stoch5SlowD,
    Stoch14FastK, Stoch14FastD, Stoch14SlowK, Stoch14SlowD,
    MACDVal, MACDMA, MACDDiff, " ",Volume[0]);
    }

    end;

    //End of Day Module
    if Time > 1600 and marketposition > 0 then sell ( "EODLX" ) next bar at market;
    if Time > 1600 and marketposition < 0 then buytocover ( "EODSX" ) next bar at market;




    Changing the MACDVAl turned mine into a jackpot with 1 loser out of 20
     
    #242     Dec 17, 2008
  3. You missed the point entirely. The spx is not a good substitute for the ES in backtesting intraday systems for a variety of reasons, one of which is that the ES has an artificial .25 increment which the spx does not.
     
    #243     Dec 17, 2008
  4. Long + Short
    Starting Capital $147,000.00
    Ending Capital $370,019.03
    Net Profit $223,019.03
    Net Profit % 151.71%
    Annualized Gain % 2306.60%
    Exposure 1.29%

    Cash Interest $0.00
    Margin Loan Interest $0.00
    Total Commission ($4.36)
    DividendsPaid $0.00

    Number of Trades 21
    Avg Profit/Loss $10,619.95
    Avg Profit/Loss % 2.11%
    Avg Bars Held 16

    Winning Trades 20
    Winning % 95.24%
    Gross Profit $235,951.82
    Avg Profit $11,797.59
    Avg Profit % 2.36%
    Avg Bars Held 14.85
    Max Consecutive 18

    Losing Trades 1
    Losing % 4.76%
    Gross Loss ($12,932.79)
    Avg Loss ($12,932.79)
    Avg Loss % -3.00%
    Avg Bars Held 39
    Max Consecutive 1

    Max Drawdown ($40,495.00)
    Max Drawdown Date 11/13/2008
    Max Drawdown % -14.42%
    Max Drawdown % Date 9/16/2008

    Wealth-Lab Score 152,716.00
    RAR 178,454.69
    Profit Factor 18.2445
    Recovery Factor 5.5073
    Payoff Ratio 0.7886
    Sharpe Ratio 9.0281
    Ulcer Index 3.2393
    WL Error Term 4.578
    WL Reward Ratio 503.8454
    Luck Coefficient 3.7049
    Pessimistic Rate of Return 6.1224
    Equity Drop Ratio 0.0012


    Long Only
    Starting Capital $147,000.00
    Ending Capital $281,186.61
    Net Profit $134,186.61
    Net Profit % 91.28%
    Annualized Gain % 834.47%
    Exposure 1.12%

    Cash Interest $0.00
    Margin Loan Interest $0.00
    Total Commission ($2.40)
    DividendsPaid $0.00

    Number of Trades 11
    Avg Profit/Loss $12,198.78
    Avg Profit/Loss % 2.37%
    Avg Bars Held 20.36

    Winning Trades 10
    Winning % 90.91%
    Gross Profit $147,119.40
    Avg Profit $14,711.94
    Avg Profit % 2.90%
    Avg Bars Held 18.5
    Max Consecutive 9

    Losing Trades 1
    Losing % 9.09%
    Gross Loss ($12,932.79)
    Avg Loss ($12,932.79)
    Avg Loss % -3.00%
    Avg Bars Held 39
    Max Consecutive 1

    Max Drawdown ($40,495.00)
    Max Drawdown Date 11/13/2008
    Max Drawdown % -19.17%
    Max Drawdown % Date 10/10/2008

    Wealth-Lab Score 60,397.82
    RAR 74,722.10
    Profit Factor 11.3757
    Recovery Factor 3.3137
    Payoff Ratio 0.9692
    Sharpe Ratio 58.3063
    Ulcer Index 3.9803
    WL Error Term 3.761
    WL Reward Ratio 221.8739
    Luck Coefficient 3.0144
    Pessimistic Rate of Return 3.3135
    Equity Drop Ratio 0.0048

    Long + Short
    Starting Capital $147,000.00
    Ending Capital $370,019.03
    Net Profit $223,019.03
    Net Profit % 151.71%
    Annualized Gain % 2306.60%
    Exposure 1.29%

    Cash Interest $0.00
    Margin Loan Interest $0.00
    Total Commission ($4.36)
    DividendsPaid $0.00

    Number of Trades 21
    Avg Profit/Loss $10,619.95
    Avg Profit/Loss % 2.11%
    Avg Bars Held 16

    Winning Trades 20
    Winning % 95.24%
    Gross Profit $235,951.82
    Avg Profit $11,797.59
    Avg Profit % 2.36%
    Avg Bars Held 14.85
    Max Consecutive 18

    Losing Trades 1
    Losing % 4.76%
    Gross Loss ($12,932.79)
    Avg Loss ($12,932.79)
    Avg Loss % -3.00%
    Avg Bars Held 39
    Max Consecutive 1

    Max Drawdown ($40,495.00)
    Max Drawdown Date 11/13/2008
    Max Drawdown % -14.42%
    Max Drawdown % Date 9/16/2008

    Wealth-Lab Score 152,716.00
    RAR 178,454.69
    Profit Factor 18.2445
    Recovery Factor 5.5073
    Payoff Ratio 0.7886
    Sharpe Ratio 9.0281
    Ulcer Index 3.2393
    WL Error Term 4.578
    WL Reward Ratio 503.8454
    Luck Coefficient 3.7049
    Pessimistic Rate of Return 6.1224
    Equity Drop Ratio 0.0012


    The more mods I make to this, a little bit closer do I get to thinking it probably does work. Still not enough data,
    from 9/1/2008 for the current version see here.

    I don't actually recall seeing results like these for a 4 month period in all the years I've been backtesting.

    \/
     
    #244     Dec 17, 2008
  5. Would you like me to add $30 of slippage to each trade?
     
    #245     Dec 17, 2008
  6. Ok, we'll go with 2 points, yes, two whole points of slippage. That's $100 of slippage per contract per side. Agreed? Great, it still looks excellent to me:
    Long + Short
    Starting Capital $147,000.00
    Ending Capital $302,255.30
    Net Profit $155,255.30
    Net Profit % 105.62%
    Annualized Gain % 1098.80%
    Exposure 1.37%

    Cash Interest $0.00
    Margin Loan Interest $0.00
    Total Commission ($38,600.00)
    DividendsPaid $0.00

    Number of Trades 21
    Avg Profit/Loss $7,393.11
    Avg Profit/Loss % 1.70%
    Avg Bars Held 16

    Winning Trades 19
    Winning % 90.48%
    Gross Profit $169,804.03
    Avg Profit $8,937.05
    Avg Profit % 2.05%
    Avg Bars Held 14.84
    Max Consecutive 10

    Losing Trades 2
    Losing % 9.52%
    Gross Loss ($14,548.73)
    Avg Loss ($7,274.36)
    Avg Loss % -1.68%
    Avg Bars Held 27
    Max Consecutive 1

    Max Drawdown ($36,897.70)
    Max Drawdown Date 11/13/2008
    Max Drawdown % -15.54%
    Max Drawdown % Date 9/16/2008

    Wealth-Lab Score 67,650.29
    RAR 80,097.21
    Profit Factor 11.6714
    Recovery Factor 4.2077
    Payoff Ratio 1.2202
    Sharpe Ratio 10.6025
    Ulcer Index 3.8255
    WL Error Term 4.02
    WL Reward Ratio 273.3331
    Luck Coefficient 4.0031
    Pessimistic Rate of Return 5.2324
    Equity Drop Ratio 0.0028
     
    #246     Dec 17, 2008
  7. You know what I'm thinking, though. I'll go gather some stock data, and see what happens. Well, then the volume won't be right.
     
    #247     Dec 17, 2008
  8. You know what I say frost? Forget the close at the end of the day. It decreases results quite a bit.
     
    #248     Dec 17, 2008
  9. nkhoi

    nkhoi

    http://data.tradingcharts.com/futures/quotes/SP.html
     
    #249     Dec 17, 2008
  10. So do you do now need to change the thread name to

    how bwolinsky designed a system based on Jack Hershey that may actually work

    instead of fraud?
     
    #250     Dec 17, 2008
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