Spydertrader's Jack Hershey Equities Journal II

Discussion in 'Journals' started by Spydertrader, Oct 4, 2005.

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  1. chapper

    chapper

    Here is what I have in DU today:

    ASPV BTUI DXPE ENER FTEK GIGM GROW LMS REDF SFCC and NWRE as a Bruno.

    Note GIGM is on IBD list of Top Rated Low Priced Stocks, so it will probably see some volume today. http://biz.yahoo.com/special/low071006.html
     
    #2861     Jul 10, 2006
  2. #2862     Jul 10, 2006
  3. tr222

    tr222

    Thanks for all the QT info. I have one question about Stochastics. Which one do I choose as the correct stochastics indicator? The only reason I ask is b/c there are 4-5 different stochastics indicators you can choose. I am assuming you choose "Stochastic Momentum Indicator", if this is correct can you tell me which values I assign for each of the following: Period/EMA1/EMA2/Signal. Thanks for everything I need all the help I can get as I am a complete newbie.
     
    #2863     Jul 10, 2006
  4. Man, FTEK sure looks like a good Hershey short to me. It showed a Bruno R sell signal and came out of dry-up today.

    I didn't trade it cuz I can only go long, but still.
     
    #2864     Jul 10, 2006
  5. gpzany

    gpzany

    TimDog,

    use the Full Stoch indicator in the lower indicator window. It will allow you to enter all three variables for the Hershey setups you need.

    Cheers.
     
    #2865     Jul 10, 2006
  6. tr222

    tr222

    Thanks gpzany, got it set properly now.
     
    #2866     Jul 10, 2006
  7. foible

    foible

    I've been reviewing Jack's camtasia videos (again) and have been trying to sort out the stop offset that he talks about. The way I understand it, we want to look for the places where the price drops in one day but recovers the next and resumes its journey. If we find these, we will know just how far the stock typically goes in it's "normal" progress so that we can distinguish normal fluctuation from a reversal.

    When looking at the results of the Bruno R v2 chartscript, the figures don't seem to match my intuition. Digging deeper into the code, I think I see why. It looks like the code is comparing the difference between the lows of any two consecutive days, records the max 10 differences, and then takes an average (with a 1.1 fudge factor).

    But my understanding is that we should be only looking for days where the low is below the bars on either side. When I experimented with the code, it seemed that my changes didn't make a huge difference.

    I studied the charts again, and see that there are many "false positives", where, during a drop, there will be a large drop in one day and a minor recovery the next, just enough to get the large drop recorded as a spike, though it was nothing of the sort.


    I'm scratching my head now, trying to figure out the best way to programatically catch these and wanted to throw it open to the group.

    Here is what I have now (using an array instead of lots of variables):

    Code:
    // replace B1 - B10
    var Spikes: array[1..10] of float;
    var index: integer;
    var barLeft, barRight, spike: float;
    var temp: float;
    
    // ...
    
    {Stop Offset Code}
    
    // initialize
    for index:= 1 to 10 do
      Spikes[index] := 0;
    
    // scan for spikes
    for Bar := BarCount() -137 to BarCount - 1 do
      begin
      barLeft := PriceLow(bar-2);
      barRight := PriceLow(bar);
      if (PriceLow(bar-1) < barLeft) AND (PriceLow(bar-1) < barRight) THEN
        begin
        spike := Min((barLeft - PriceLow(bar-1)),(barRight - PriceLow(bar-1)));
        for index:= 1 to 10 do
          begin
          if Spikes[index] < spike then
            begin
            // swap
            temp := Spikes[index];
            Spikes[index] := spike;
            spike := temp;
            end;  // if
          end; // for
        end; // if
      end; // for
    BarTotal := 0;
    for index:= 1 to 5 do
      BarTotal := BarTotal + Spikes[index];
    BarTotal := (BarTotal / 5) * 1.1;
    
    I think I'm making two mistakes which are missing the spirit of Jack's stop offset. First, I am checking to see if the lows of the bars to either side are greater, and then I consider this a spike. I don't think that's quite right.

    Second, I'm taking the min of the distance between the lows on either side as the magnitude of the spike. I think that's close, but I'm not so confident. Maybe when we take the top five values and then average them out, all of these minor false positives will fall by the wayside.


    Does anyone have any comments? I'm very much a newbie here, and think I may be making a conceptual mistake somewhere, so if you can fix my thinking, that would be great.

    If no one can see anything obviously wrong, maybe someone can volunteer to help me out. I'd like to manually calculate the stop offset for a few stocks, figure out what we did, and then try to do that in code.

    Thanks all.
     
    #2867     Jul 10, 2006
  8. foible

    foible

    Another question about the camtasia videos.

    In meetup20060413a13, Jack is explaining the stop offset for AKAM and is using $1.00 as his offset. When he examines a buy signal, he draws in the channels and then switches to $0.85 as a stop offset. Is this just a slip-up or is something else going on here?
     
    #2868     Jul 10, 2006
  9. I think Jack simply misspoke.

    - Spydertrader
     
    #2869     Jul 10, 2006
  10. I still draw my stop offset starting from the last low - moving it just enough outside the IT Channel to avoid a spike. I don't spend a great deal of time concerning myself over the exact distance. We use stops in an effort to provide some protection in the event of a 'worst case scenario.' The stop offset isn't designed for use as an 'exit.' If the trade isn't going right, you should be headed for the door well in advance of the stop offset price.

    If you do discover an easier (or superior) method for automatically calculating Stop Offsets, code it up, and I'll add your code to the next Chartscript Upgrade (with credit of course). :D

    - Spydertrader
     
    #2870     Jul 10, 2006
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