As you correctly observe, Jack teaches to look for stocks that appreciate by 20% within a period of six months that cycle 5 times minimum over 6 - 8 days. Since Jack operates from a standpoint of excellence, he sets the bar extremely high. I have yet to achieve consistent 20% gains as described in The Jack Hershey Equities Method. Due to market conditions, I routinely watched as the market took back the gains of previous trading days before I could 'bank' the profits leaving me with less than optimal profits. However by reducing the hold time to four days, I have been able to produce consistent 10% gains over the past year. As a result, I altered the holding time thereby providing the opportunity to accrue a greater number of 10% gains. This also had the affect of increasing the number of cycles in which my money would be placed. Jack explains it this way: For me, waiting to make the additional 10% by holding an extra 2 - 4 days increased the number of losses. Reducing the hold time and setting a target of 10% reduced the profit per trade, but it also increased the number of overall 'winning' trades and significantly lowered the number of losing trades. As the market remains a dynamic entity, I suspect no one method will work all the time. I agree your methods do maximize the appreciation rate and help you to achieve the greatest money velocity based on your interpretations of Jack's teachings. Without a doubt, your observations mirror the teachings of Jack Hershey. However, Jack uses a 'stop offset method' for calculating where to place his stops. I use a different target price based on risk reduction. YMMV. The use of a trailing stop affords one the luxury of improving the risk / reward ratio as the trade begins to move in your favor. Excellent advice you provide here. I appreciate your contributions to the discussion and encourage you to continue. Feel free to share your methods for creating your version of the Hershey Universe and / or Dry Up Volume calculation. I remain confident that everyone benefits from your input. - Spydertrader
Thanks Spydertrader. You write thoughts that are well thought out. There are some spectacular people on Elitetrader - Im sure if many of us met each other we would be surprised how well we get along - intellectual curiosity/decisiveness etc - similar traits. Regarding dry-up volume - I look at it visually - the market doesnt calculate it, volume is based on beliefs of traders and willingness for them to do an action. If volume has dried up I dont buy - I wait for confirmation, however slight. A tick up from dry-up volume, with a price chart that looks as though it is about to break out (channels, consolidation, stochastic) is what I look at.
Sevens - Ones - Zeros LB - DRIV - DECK NGPS - SHFL - PETD CIB - PHS - NTAP LCAV - MRVL - ARTI NAVR - CRDN - VCLK TIBX - LSCP - HTLD JUPM - TNP - CREE VCLK - SINA - MTEX ARTI - EAGL - AMHC NTAP - SFCC - FFIV Hotlist NGPS FFIV JUPM NAVR SINA PETD Watch List ESMC - DU Cycle - DU5 - DU10 LWAY - DU Cycle ANIK - DU Cycle - DU5 SWIR - DU Cycle - DU5 - DU10 - DU20 HANS - DU Cycle EVCI - DU Cycle - DU5 - DU10 ENWV - DU Cycle SINA - DU Cycle - DU5 DPTR - DU Cycle LIFC - DU Cycle SRVZ Wealth Lab Equations - Dry Up ECSI ENWV LIFC G33M4K Score for the above Stocks ECSI - 4 ENWV - 0 LIFC - 1 Gallas2 "Keep an Eye on These" Stocks SWIR (Attached) (VSEC, IDSA, HRT, LWAY, NVEC & NGPS have float outside normal parameters)
Hi Spydertrader: Dry-up: Have you found any method works better than simply eyeballing for volume breakout from volume dryup, with volume dryup being eyeballed from historical pre-breakout levels? This assumes EOD trading and not looking at first two hours trading. For a living: You say you retired after one year of this. Is that starting with a large capital base, or did you do, as some people I know have in forex, increase a small stake by more than a dozen times in one year to get to that stage?
From various web sites, USENET Archives, and discussions here on elitetrader.com, I have seen several methods for calculating dry up volume. In my search for the best formula for automating the dry up calculation, I listed several of these methods in the following post from another thread: http://www.elitetrader.com/vb/showthread.php?s=&postid=524735#post524735 Unfortunately, the search for the 'perfect' formula or method for Dry Up Volume calculation continues even today. The following URL links to a post that contains the 4 different methods used in this journal for Dry Up Volume calculation. I currently use several different methods because no one method has consistently shown to accurately anticipate a volume breakout. http://www.elitetrader.com/vb/showt...0348&highlight=dry+up+calculations#post600348 Unfortunately, I have yet to find a formula that exceeds the results experienced by Jack Hershey and his 'eyeball method' of determining Dry Up Volume. An automated process for determining levels of DU Volume, FRV and Peak Volumes is located at the following URL: http://www.wealth-lab.com/cgi-bin/WealthLab.DLL/editsystem?id=32994 I based the above Wealth Lab Chart Script on the work of Vorzo, Max_Gainz and others. I have used the above automated process for quite some time, and while not perfect, it does produce results. Prior to beginning the journey to learn about Jack Hershey, I experienced success trading Exchange Traded Funds (ETF's) - primarily the QQQ, but also the DIA and SPY. I have never traded in the Forex Market. I answered a similar question to yours in the "Part-Time vs. Full Time" Thread. Rather than copy and paste my answer, use the following URL to see a detailed description of my journey from EOD Trading to Full Time Trading. http://www.elitetrader.com/vb/showt...7&highlight=part+time+Vs+Full+Time#post630427 I hope you find the above information helpful. - Spydertrader
We generated no trading signals today - either long or short. Actual volume for our Watch List stocks failed to exceed calculated Dry Up Volume. Early on, it appeared as if both SINA & ENWV would have enough Pro-Rata Volume to generate a signal. However, this was not the case as pace of volume declined for both stocks. Both equities remain off the their respective highs. We came close to having our 5% stop loss ($12.80) triggered with CALM. Current low of the day remains $12.85, and price has risen from that low at the time of this post. SWIR continues to rise in price, currently up .16, but off its high of the day. - Spydertrader
HANS really took off today, but did so on relatively little volume. Total volume for HANS failed to reach the 65-day average. Volume for HANS failed to reach DU volume by 11:30, nor did actual volume reach FRV by end of day. In addition, since price didn't really accelerate until late in the afternoon, we might want to keep an eye on this stock for tomorrow. - Spydertrader
Sevens - Ones - Zeros LB - SHFL - JUPM IRS - EAGL - LCAV NGPS - PHS - TNP RSTI - NAVR - NTAP TIBX - CREE - AMHC ASPM - DECK - JCOM PTRY - MTEX - MRVL CIB - PMTI - PETD URBN - CRDN - DPTR GDP - SINA - ARTI Hotlist NGPS JUPM NAVR GDP PMTI SINA PETD Watch List VSEC - DU Cycle - DU5 - DU10 - DU20 IDSA - DU Cycle LWAY - DU Cycle - DU5 - DU10 ANIK - DU Cycle - DU5 - DU10 TRMM - DU Cycle SWIR - DU Cycle - DU5 - DU10 - DU20 ALDN - DU Cycle EVCI - DU Cycle - DU5 - DU10 - DU20 NAVR - DU Cycle - DU5 SMTS - DU Cycle - DU5 - DU10 NTES - DU Cycle SRVZ Wealth Lab Equations - Dry Up ENWV G33M4K Score for the above Stocks ENWV - 2 Gallas2 "Keep an Eye on These" Stocks NTES (Attached) (VSEC, IDSA, HRT, LWAY, NVEC & NGPS have float outside normal parameters)