Jack Hershey's Equities Method

Discussion in 'Strategy Development' started by Burly Wood, Dec 5, 2019.

  1. Hello All,

    Hopefully there are people out there still trading this method or know the inner details of the method. I have read through many threads, taking many notes but I have a few questions as to some details of the method. This method makes sense in my head but still I have questions. From my studies here are the general principles on how to cull a universe of stocks from reading Jack's posts, Sypder's posts as well as others.

    1. RS/EPS 90 or better, adjusted to achieve a list of around 100 or so stocks.
    2. Filter the list looking for stocks priced between $10 and $50. Filter by float for stocks between 5m and 60m shares. Filter by avg volume being greater than 200k shares. Also filter by stocks that have made 5-20% moves or greater in the last 6 months spanning over 6-8 days.
    3. Sort by % volume change.
    4. Create three lists comprised of 10 stocks. One list is 7s which are gathered from the top of the list being the greatest volume % change with an increase in price. Another list is 0s which come from the bottom of the list. The final list being 1s that come from the middle of the list around the 0% volume change (generally 5 above and 5 below that area).
    5. Rank these stocks using the assessment sheet that was provided in other threads. This tells you the strongest stocks to trade and also breaks any ties if multiple signals are generated.

    There are more details to the method such as risk management, money velocity, the entry tactics etc. but I'll stop there for now not to make this post too long. I have some questions based on the above.

    Questions:
    1. I have been playing around with IBD e-tables examining the RS and EPS rank but I do not like that I don't have the ability to really filter what I'm looking for. Using IBD only returns so many stocks and in varying price ranges. Certainly not 100. Are there any other sites (paid or free) where I can obtain the RS/EPS ratings? I've searched and searched and have yet to find anything suitable for this method. A lot of what was used in the past is no longer available for this method.

    2. The volume that should be used in the sort is the 65 day average? It's not the current day's volume or the total average? Also 20% moves, is that close to close or low to high? From what I've read it's also only up swings not both up and down swings? Basically what constitutes a move? How much pullback is allowed before "the move" starts over, changes direction etc?

    3. no questions there

    4. I've also read that Jack scored the stocks in a binary fashion (1 or 0) with the multipliers on price change x4, volume change x2 and A/D x 1. My questions here are what denotes price and volume change? Is a penny increase in a stock considered price change, 1 share greater a volume change or do we need to see greater change? Price change I also assume is close to close? Also I've read the 1s list can also continue up from the bottom vs the middle portion of the sort but I suppose it's somewhat near the middle anyway. As far as the scores go, do they change daily? Based on price and volume change, a 7 today could be a 3 tomorrow etc etc. My assumption is that they do so how does that effect the trading system? Also what is used to assess accumulation and distribution. I read that Worden's BoP indicator was used? Is there another method besides using that indicator. I use ToS and they have an accumulation and distribution indicator. I've also read that the absolute value of the BoP indi was used and also the actual change in values. I can work through that but what would be the best way to measure acc/dist?

    Those are basically the questions I have as of now. I ask them because I can most likely code all of this but need the appropriate answers before I can move forward on that. I am going to continue to read and study but my eyes hurt and my brain is sort of turning to mush scouring all of the threads so I figured I'd ask. The answers are probably simple so if anyone out there would like to throw me a bone I'd really appreciate it or even just point me in the right direction. Thanks a bunch in advance for any help.
     
    Last edited: Dec 5, 2019
  2. dozu888

    dozu888

    this is no good.

    anything that is parameter driven is guaranteed to self-defeat... i.e. enough people crowd in and become vulnerable to counter trades.
     
  3. RedDuke

    RedDuke

    Hi Burly Wood,

    I have been following Jack saga for over a decade. Participated in that big 2008 Spyder thread, and met in person many people in NYC including Spyder.

    I incorporated some of their concepts, like wall, into short term trading system (long abandoned).

    The thing is, no one ever demonstrated that they can consistently trade this method, or even for short period of time make money. Spyder was supposed to trade it live at the end of the year, when he ran a year long thread, but decided not to. Same for Jack, I offered many times to him to set up virtual rooms, where he can trade, but there was always some excuse, along the lines, my PC can not handle this software.

    While method does seem to have merit, use your time on it wisely.

    Regards,
    redduke
     
    fan27, beginner66, schizo and 3 others like this.
  4. lindq

    lindq

    You're wasting your time going down a deep rabbit hole.

    Jack delighted in wrapping newbies up in complexity. It was a special talent of his. Much like an absent-minded professor.

    My advice is that if you're trying to follow a system that you can't understand in a few minutes of study, then you're on the wrong path.
     
  5. schizo

    schizo

    When was that, like 2005-ish? I still remember that thread, congregated by both followers and bashers. Distant memory now but those were the good times nonetheless. :finger:
     
    quickturtle likes this.
  6. Like redduke, I was here for all of the Jack drama. I think you have to separate Jack the trader from Jack the cult. The initial concepts Jack revealed here seemed pretty sound. As noted in the OP, you watch a bullpen of stocks, selected because they tend to move. As I recall, you waited for a volume dryup in conjunction with a correction, the got a buy signal on a price and volume breakout. There were exit rules premised on using volume spikes to confirm price peaks.
     
    Burly Wood likes this.
  7. Specterx

    Specterx

    Blast from the past.

    Jack's (and Spyder's) 5-minute ES daytrading methods were a load of BS. I wouldn't bother looking for "inner details" of his methodology for trading stocks or anything else.
     
    destriero likes this.
  8. RedDuke

    RedDuke

    It was a bit later, either 2007 or 2008. This was the time when Surf would occasionally throw Surf feasts, and many people would show up. Fun days indeed.
     
  9. Thank you for all of your responses thus far. Trust me I understand the varying opinions as I’ve probably red hundreds of forum pages about Jack, Spydertrader etc. the good, the bad and the ugly. I was just curious if anyone sort of had more of the minute details. I do agree with AAAintheBeltway that some of the concepts do seem sound and make total sense to me. I do also like what appears to be a systematic approach to what was done in the equities method threads. Find healthy strong stocks, rank them in some manner, filter them based on price, volume, whether they actually move or not by some distance at some type of frequency and then attempt to time it all based on some sort of breakout seems sound. Without the minor details however it’s difficult to put all the pieces together.

    Thanks again for all of your responses.
     
  10. Sprout

    Sprout

    Comments within quoted text.
     
    Last edited: Dec 5, 2019
    #10     Dec 5, 2019
    midtown and Burly Wood like this.