In at 36.55 out at 38.4. so I liked it. Using Jack's idea of using first derivitive of price velocity coupled with volume surge. Had a good quick trade with ERS also. Thanks, Doug
Would first derivative of price velocity be the acceleration? Sorry for the naive question...and can you run a standard indicator for that one...or do you have to calculate yourself? Been following for a couple of days now...great thread guys. It's going to take me a while to digest everything though, some similarities to the way I trade, I noticed that we often have some tickers we follow in common. Couple of my best trades last year were CMT and ERS Thanks for all the posts guys and thanks for sharing this Spyder
Yes, the first der. of velocity is acceleration. I wrote an indicator for it and I use Tradestation. I'm playing around with the calc method. Doug
does anyone have a link to where jack talks about stocks that gap up after a DU day? i remember reading something aboug 5% and 10% gaps by spyder but i think it was just a reference to what jack said somehwere. (i'm referring to gaps that occur just before taking a position). (sirf is a good example of a 'price peak after volume peak' scenerio)
I recall Jack's formulae containing two different equations for gapping stocks (one for 5% and one for 10%). Jack scanned his "Universe" of stocks for such equities each day. In my experience (prior to posting in Journal One), avoiding these equities provided better returns. However, a trader in Journal One (who's name escapes me at this moment) pointed out differences existing between those gapped stocks which had a greater propensity to fill and those that did not. - Spydertrader
Thanks Spydertrader & thenewguy. What do you mean by "maintaining rank"? I thought that Final Universe stocks have to meet all criteria, including RS and EPS.
Rank is essentially a measure of volatility, but in a very specific way. Although I haven't kept up with this journal in a while, I believe it's still the same as the original: Cycling %20 five times in six months. The way I look at it is that the EPS and RS bring the stock to your attention, the rank makes it tradeable. Personally, however, if I noticed a stocks RS and EPS dropped signifigantly, I'd take it off my FU list. I'm sure others have different takes on this. Thanks, The New Guy
To gain admittance to the Final Universe, each equity must meet or exceed each individual entry criterion (Float, average volume, price, EPS rank and RS rank). However, once a member of this club, I only remove an equity for 'failing to maintain rank.' Should an equity drop below the minimum 'average daily volume' or required 'float' levels (or any other criterion besides 'rank'), I do not remove the equity. I developed this rule after observing (prior to my first post in Journal One) that a stock's ability to continue to cycle proved most advantageous when compared to all other criteria. By example, many of the profitable trades in Journal One resulted from equities which no longer had a high EPS or RS rank, but did maintain their overall rank (and as a result their place in the Final Universe List). For another example, we need to look no further than HANS. This company has held a place in the Final Universe for nearly two years even though price for HANS falls well outside our optimal parameters. The reasons for keeping HANS as a member of The Final Universe stems from the fact that HANS has continued to cycle, again and again, providing ample opportunity for profit. As a result, it only makes sense, from a perspective of improving the opportunity for profit, to keep stocks (such as HANS and FORD) who so regularly follow our trading paradigm. I hope the above provided some clarity for you. - Spydertrader
As a followup to my comments re. using the derivitive of price velocity, I conducted a number of intraday trades today to see how it worked. On a real down day, I was satisfied. Entry was based on several factors: 1. A high money velocity (first derivitive of price). 2. The second derivitive of price (acceleration) above 0. 3. The second derivitive of volume above 0. Exit was taken when price acceleration went below 0. I only traded stocks having a money velocity in the top 5 of my JH universe measured using 30 minute bars. I also tried Jack's idea of trying for wash trades. Results: Wins 5 Losses 9 Avg win 3.5% Avg Loss 0.35 % Doug ps-Since this is my first day, I messed up a couple and missed some nice ones near the end of the day such as ERS.