I have been using the WL script posted on the first page of this thread. I have noticed that some stocks that others put on a list (away from this thread) don't pass on the WL script because it uses strict standards - "5 cycles within 6 months from low to peak consisting of 20% or more within 6, 7 or 8 days". I have to think the reason for the strict standards has to do with velocity of profits, or turning your money as many times as possible. Therefore, if a stock is taking longer than 8 days it might very well perform well, but you end up holding it longer to reach your objective, thus reducing your ability to turn your your money more often and make more as a result. Just a few thoughts.
Actually, I've combed the WL script in detail. Don't get me wrong the code is superior w.r.t. anything out there. However the details of the code indicate that the 6-8 day period is not strict but is coded such that it is 20%+ over any period less than 8 days. If one were to plug in TASR to WL, one will currently find one 2 day cycle, two 4 day cycles, and one 5 day cycle, which leads me to believe that this is not a strict 6-8 day cycle but less than 8 days... I know most will not want to refine any of WL, I just want to understand and help if I can. I hope that this fact is apparent to all from my continued contributions here. Thanks and Regards G33M4K the Newb
That is what I want it to do. In the spirit of turning the money as many times as possible, the quicker the cycle happens the better. Don't you agree? Just my thoughts.
Interesting... I agree and don't agree but am intrigued by your perspective. Jack mentions 2 things with regards to this cycle concept and let me not get too hung up on why and why not since I believe they're really not important. However, one of the foundations here is to not be exposed to unnecessary risk. On a two day cycle period, one would have to question whether news/rumors were the driving factors for this 20%+ run up. TASR as we all know is notorious for being rumor/news driven. On a 2 day horizon news is a much larger driving force than over a 6-8 day period. Y/N??? Despite this great 6.8.04 hindsight TASR opportunity, we are adhering to P V A/D constituents as our vehicle of choice as opposed to information. It is evident that news/rumors are fast vehicles but quickly run out of gas within the same or subsequent days. If we look closer at the 2 day 20% increase on 6.8.04 of TASR we find it in an R2L channel traverse of a downward IT. Correct me if I am wrong which I'm hoping I am, but a major underpin of our hotlist is dependability (5+ cycles) and sustained (6-8 days) price growth. Can 2 days really be considered sustained? Just like we expect a high quality car to last more than a few years, we expect our high quality stocks to have price growth over more than a day or 2. I agree turning the money is important, but as far as I've read, one can be in for 2 out of the 6-8 days if the desire is to turn/appreciate capital the quickest. The strongest proponet that I find for being strict with a 6-8 day cycle was a comment made by jack saying that smart money is in late and out early. This same principle applied at 6.8.04 would have been a loss since one would have gotten in at the midday and out the next day around midday whereas to have gotten a 20%, you would have had to be in at the low and out at the high of the following day. Any thoughts? Thanks Newtoet G33M4K the Newb
Sorry. I shouldn't have used unnecessary details, especially since channelling is a technique for those who are sufficiently advanced in the application of Jack's principles. But in case you are wondering, you can create a 3 point channel envoloping TASR's 6.8.04 price movement. Basically, channels gives you a broader context for how the stock is trending. If you're a newb, do not get wrapped up on this detail. When I first landed on ET, channeling was the very first posting I saw and had to back my way out of to this stage of the process. Since my occupation requires that I do this regularly, it's relatively easy to throw out details which are not important for any given stage of the learning curve. In any event, once you have your channel, Jack mentions a couple of things that can happen. The channel itself tells you one thing, whether the stock is trending up, down, or laterally. I conceptualize the channel as a road with a car that you can steer and is guided by guard rails that you can't see but can only anticipate as the car is moving forward in time. Kind of like mapping out a road in complete darkness with the roads' guardrails as the steering wheel for the car. The channel defines what's right and left. From what I've read, points 1 and 3 define the left side of the channel and thus point 2 is on the right side. Thus an R2L would be the price displaying a Right 2 Left traversal of the channel (the car bouncing off the right guard rail and heading towards what is believed to be the left guard rail). The channel itself is a form of the Interim Trend, also know as IT. Don't take my word for it. Look in some of Jack's other threads. Jack has provided numerous graphs. I read prob no more than 4 or 5 posts so I'm no expert and I see that it was mentioned earlier in this post. Again, my point here is as a newb, and this is how I have oriented myself, i know that this detail is currently not important to dwell on since it isn't a fundamental but a refinement on a fundamental. My entire learning curve has only been 2 weeks long regarding jacks strategy so I'm only hoping to ask the right questions that I think are helpful to newbs like myself. I never assign homework. I try and go one step furthur and create a cheat sheet for the the items that are solidly understood . However, I am always happy to answer questions if I can help. Hope this helps. If not I'll be more than happy to elaborate furthur. My intention is not to overwhelm any other newb with anything that is not fundamental. My only objective is to get a general picture and then iteratively sharpen the image. Personally, my releases are still in the obtaining a general picture realm. I'll know how to iteratively refine once I know generally what I am looking at on a day to day basis. Thus my question regarding cycles... REGARDS! G33M4K the Newb
I have enjoyed reading the ongoing discussion regarding time and length of various cycles. To answer the above question, we need to look at how we arrived at the point in time that resulted in the question being asked. Jack Hershey operates from a standpoint of excellence. He seeks to minimize risk, and at the same time, maximize the ability of capital growth. Jack has posted numerous times about the compound interest formula advising others to plug in various numbers (test various scenarios) to determine their own optimal growth potential. Jack has pointed out (and the compound interest formula confirms) that increasing the number of cycles traded is superior to increasing the gain per trade. Newtoet correctly interprets the results of the compound interest formula when he posts: Jack has often suggested exiting early to use those dollars in another stock (one beginning to take off) thereby increasing the number of cycles traded. Jack's use of 'eyeballing' the 'bulked' charts at the clearstation.com web site allows for quick determination of the 20% moves. Jack states: We seek "20% moves occurring 5 or more times over the past 6 months materializing over 6 to 8 days" in order to capture "half of the move price move. Doubling 10% gives me a quick measure of the moves." The Wealth-Lab Chartscript (and other methods of automation) seeks to quantify the "eyeball" methods used by Jack. Developed as a 'time saving device,' rather than a precision instrument, the Chart Script allows easier 'culling' of the initial Hershey Universe over use of the template analysis sheet. Used primarily for dry up and rank calculations, the fundamental use of The Chart script serves to reduce the time spent on analysis - maximizing the use our time as we seek to maximize our money velocity. Based on this view of the Chart Script, we then need to prioritize our Hershey Criteria. Since Jack has proven that an increase in the cycles traded increases money velocity, we can therefore place number of cycles higher in priority than strength of move AND number of days required to obtain that move. The 5+ cycles is a minimum. The 20% move is a minimum. The number of days to obtain that move is a maximum. The above hopefully has illuminated the terrain in which we currently find ourselves deployed. In regards to your questions determining if 'strict adherence' to certain criteria should be followed, several answers apply. In other words, it depends. One area in which Jack has been known to 'break the rules' is with his list of 'tenured' stocks. In the past, stocks from this list did not necessarily follow 'strict adherence' to many rules - including the most fundamental rule of dry up. Jack states that these stocks become "like old trusted friends." He knows their tendencies extremely well. Profit from trading his 'tenured' stocks comes not from following 'strict adherence,' but rather, from the experience obtained from numerous cycles traded with these particular equities. The many questions presented here, and the discussions resulting from those questions is one method by which 'iterative refinement' can occur. The process of 'iterative refinement' creates an environment in which fine tuning of Hershey's methods produces superior results. However, understanding the fundamental reasons behind the strategy must be the first step. I suspect that Jack wanted everyone to understand the fundamentals first - before moving on to automation. Furthermore, there is no Holy Grail - no one set of formulae that will produce the daily 'Hot Stock' about to break out. The individual rules used in trading the Hershey Equities Method are only parts to a much larger picture, just as the individual trees are part of a much larger forest. Once again, many thanks to everyone contributing to these discussions, and to those sharing their efforts. Your contributions reinforce the understanding of the Jack Hershey Equities Methods for the more experienced, and clarifies certain points for those new to Jack and his theories. Please feel free to continue. -Spydertrader
Thanks Spydertrader, The mbtrading format is exactly what I had in mind, and likewise would require a user input dry-up volume. I'm now looking for a good way to grab some short term history. Yahoo.finance? Might be able to eliminate the user-input requirement. Otherwise, it would simply be a user input dry up combined with a save of yesterdays volume. Do you think being able to watch your universe this way, in your own Excel sheet, would translate into more cash? As an aside, a pattern I would really like to capture is one where your stock has dipped to a zero and, for the past two days price has been rising moderately, as well as two moderate volume gains above dry up and previous day. Is that not a good screen? JohnnyK
Yes, this is very similar to what I do with the Quotetracker program. I think what you describe could be very helpful with excel. Combine that which you suggest with automated scoring and I think you have a winner. Your screen here would appear to provide added focus on a particular group of stocks. I think many would find that useful as well. - Spydertrader