Spydertrader's Jack Hershey Equities Journal II

Maybe my way of doing things also alters the method, but if I see a stock very close to reaching FRV by EOD (and I mean, within 5-10 minutes of closing) then I basically count it as reaching FRV for purposes of holding onto the stock another day....

And in instances such as VPHM, where it is a moderately traded stock, I further rationalized that there was bound to be volume added to the totals after the bell rang based on late reporting, etc, making it even more likely that the official volume would read above FRV.

 

I had VPHMt at 87% of FRV about 5 minutes before the close, but as I mentioned earlier, my setup was understating volume. If it had been 95%+ at that point, I would have assumed it would reach FRV due to the volume rush at the close and aftermarket trading.

Do you consider volume in the aftermarket hours?

Doug

 

I don't really consider anything past 4:05 - 4:10pmET

 

About 60 days ago, I opened a small account with IB dedicated to testing this method.
After 18 trades, the account was up as high as 20%. As of Friday it was back to its starting balance.

I just finished going over each trade, not only looking for mistakes but also considering various scenarios such as:
No FRV rule, No 10% target, Use of Channels and perfect use of rules. By far, the use of channels would have made the biggest difference, followed by elimination of FRV rule. (I realize that 18 trades is not enough to justify any drastic rule change especially since this is all in hindsight.)

I had never used channels before Spydertrader posted the example using parallel lines (page 125) Now I see how important it is to be able to use channels.

The best results (49%) were from the scenario of
1.No FRV rule
2.Use of Channels (details in word file)
3.No 10% target

I am posting three attachments.
The excel file shows 10 slightly different scenarios (including actual) and the different possible results.
The two word files contain daily charts with channels that would have been drawn prior to entry along with an explanation.

Since this is such a difficult system to test, I hope you find this useful. I would be interested in hearing any reviews of other trades.

 

trade explanation part 2

 

part 3

 

10 Scenarios

 

Thanks. I have only dabbled with this system while trying to explore many of the same concepts. Should be interesting to read. I'll try to give you my feedback shortly.

Mike

 

5% trailing stop hit on PETS @ 14.12

 

I am out of PETS too at 13.87