Spydertrader's Jack Hershey Futures Trading Journal

Spyder,

I'm glad you're asking where we are in our journey. This is my pit stop report:

I've been annotating the ES and YM real-time for 30 trading days now. As I was going through my notebook of charts, I can really see a significant improvement, especially in the area of the gaussians. Now I let the gaussians be my guide when drawing channels.

For the last 15 or so trading days, I've been using a sim account and been having reasonably good results. I'm trading essentially FTT to FTT. The past two weeks have been pretty good with very few losing days (except for today!). Generally, I seem to capture from 3 to 10 points each day. I do not hold my trades for that long (mistake). I generally take a 1 to 2 points off each trade and then get out. My inability to see the signals for change sooner keeps me from staying in and reversing when I should.

When I'm trading I generally feel lively and excited and as if I have things under control. Every day I feel that I have a better handle on the market as it unfolds and I think I'm improving at seeing the turning points coming up.

I have been monitoring Str/Squ on the tick level. Sometimes when I strong str/squ readings they seem to help and at times they don't seem to have any effect at all. The jury is still out in my mind on how much str/squ helps. I continue to monitor it however.

I would like to be able to recognize the turning points a little sooner and I suspect thats what DOM, T&S and tick charts will do for us.

I believe I am ready for some additional tools, so pile em on! As a famous race car driver once said, "If everything seems under control, you're not going fast enough."

ps. I know lot's of people thank you, but I don't think it can be said enough. If it weren't for your tenacity in keeping this thread going, most of us wouldn't have gotten this far. Thanks for all you do.

 

How have your trades (real, simulated or monitored) go over the last week?

.....Total -9.75 pts. 3 wins, 13 losses. Most days negative.

How do you feel during the trades? Anxious? Nervous? Ecstatic?

.....Calm but very frustrated at the results.

Can you 'see' the market as it unfolds?

.....Usually, although I frequently misinterpret swings within a traverse as a new pt 3. I appreciate that this is a “resolution” issue but I often find it tricky trying to distinguish between a wide traverse and a narrow channel.

Where do you continue to see difficulty, and where do you continue to see improvement?
....My continued difficulty is the misidentification of a new pt 3 and missing the real ones! Having identified a pt3 correctly, I frequently run straight into an FTT. I can often recognize the FTT but I am trying to focus my trades at the forest level and consequently my exit at the RTL BO will result in a small loss. As yet, I am also unable to spot intrabar “change” signals in a timely manner.

I can see improvement in my ability to recognize FTTs, Gaussians, even the occasional flaw, and I am getting better at matching my channels to Gaussians.

Can you correctly use Channels, Gaussians and STR / SQU to correctly anticipate continuation or change?
......Channels and Gaussians, yes. I have just started to monitor str/squ over the last week (including making a video of the screen every day) and I am beginning to see the correlation. I am sometimes unsure as to whether I need to update the offset but I am sure that will come with practice.

How can I help, or what additional aspects need further clarification?
.....I am unclear why you sometimes use a recent pt 3 as a new pt 1 instead of recycling the earlier pt 1. I presume it has to do with Gaussian alignment but after careful study of your posted charts, I am often unable to see the correlation.

The timely identification of a new pt 3 often presents the same dilemma as when trying to identify an FTT. The question of “is it or isn’t it?” raises what I feel is often subjective analysis. Questions such as “Am I still in a wide retrace?”, “Is this the end of the retrace?”, “Should I be widening (fanning) the channel or starting a new one?” etc, frequently occur. I know that the answers lie in the interpretation of the Gaussians but we all know that they are rarely “text book”. I have started to pay particular attention to how price leaves a channel and if the required volume increase does not appear, I widen the channel.

A question mark remains regarding entry at a new pt 3. Your advice is to enter “when you feel that you have a new pt 3”. My response is, “At what point should I feel that I have a new pt 3?” I identify the FTT, the reducing volume as price retraces to the RTL, the RTL BO and the b2b/r2r volume increase, and the decreasing volume as price retraces towards a potential pt3. I guess it is knowing when this retrace has ended. Price will often have moved significantly away from the pt 3 before evidence of an increase in prv appears and I am left thinking “d*mn, missed another one”. So, am I correct in assuming that one should enter before seeing increasing prv? I know that I should not use the break of the pt 3 bar as my entry cue but this often occurs before the prv kicks in.

Lastly, I understand that the afternoon usually kicks in with a volume bo from a lateral channel. However, I see frequent occurrences of this event just being a “stop run” and price then falls back into the lateral channel. For this reason I am reluctant to use bracket entries. Could you clarify the procedure for getting back into the market after lunch.

And finally, I would like to thank you for your continued selfless dedication and patience

 

Describes how I'm feeling perfectly

Also on my reply to Spyder I mixed up LTL and RTL, sorry... I know I'm having trouble but I DO KNOW the difference between those, was just in a hurry I guess.

 

ES 4-30-07

 

How have your trades (real, simulated or monitored) go over the last week?

I've been a break even trader for a month now. I trade part time around a full time day job. Also in 2004 I traded 6 months unsuccessfully using a service provided by an experience emini trader. My charts look great.
My execution is OK. I spot FTT's well and make several decent trades but typically I mess up around the HVS and CCC's. I recognize them but
I make several entries/exits in or around the CCC's. My thinking during CCC is screwed up ( I know I should hold
if my trade is in the same direction as the trend ). So far I am a break even
trader. I must eliminate my CCC trades to improve. Also I spot gaussians but still frequently mess up forest and tree type guassians. Still don't
trust the str/squ tool.

How do you feel during the trades? Anxious? Nervous? Ecstatic?
Always alittle nervous and apprehensive. Always questioning my analysis.

Can you 'see' the market as it unfolds?
Sometimes to rarely. This question probably gets at the cause of my feelings while trading.

Where do you continue to see difficulty, and where do you continue to see improvement?
My charts are excellent. I ussually get chopped up in and around CCC and abnormal "spikey" type price movement
where the price may BO and then resume its intra channel price movement.

Can you correctly use Channels, Gaussians and STR / SQU to correctly anticipate continuation or change?
STR / SQU - Not sold on this tool yet.
Gaussians - I consistently confuse tree and forest guassians in my trading. This is probably my biggest
problem.

How can I help, or what additional aspects need further clarification?
You are already a big help by answering our questions. I find your forest/tree charts very beneficial.
Maybe a real time trading day video would help. Keep on emphasizing forest and tree chart formations.

This time I kept my day job and other streams of income while learning how to trade. This has really helped me to
relax. In hindsight, when I am working and reviewing the charts in the evening, I always seem to think I would of
made money if I was trading. But in reality I am a scratch trader when I trade several days a week. This is the
difference between sim trading and real time trading.

 

Not consistently profitable yet.

I feel somewhere in between anxioius and nervous.

I can usually see the market unfold unless volume is low. I'm starting to think I'd be better off not trading during lunch duldrums or when volume is low. Not sure what I'll do in the summer if it gets quiet, which it often, but not always does.



I see the channels and gaussians much better now. Still get chewed up in the HVS areas as I don't stay in the forest level and try to use tools I haven't been taught.
Today, 2 times I traded 1 pt bounces off lows in the middle of the downleg using what I thought were ftt's at dom walls with str. signals. I know I'm not supposed to be doing this yet but wanted to try. These setups seemed clear to me but usually when I try these I get chewed up and give back profits made earlier. I'd have been better off staying in the forest level in the long run as my renteries weren't always successful. I was helping employees and missed the first leg down and had to find a entry point.
I don't stay in the trades long enough. Still fighting old psychology. Today was tough, I had many entries go my way 4 ticks and shake me out with a tick profit or miss the sign to reverse and bail too late.
The str/sqz is starting to make sense when used at the proper times.

Spyder, taking on this task is quite admirable and I hate to ask for anything more. But since you asked to have a time stamped recording of your thought process while trading would be priceless. I found the sct q/a thread where Jack broke down a couple days in sequences very informative after putting in enough work to understand what he was saying this time around. Something like that would help me a great deal.

This kind of feels like an AA confession.

 

LOL.

God grant us the serenity to accept the things we cannot change, courage to change the things we can, and wisdom to know the difference.

Remarkably apposite in the trading context.


I'm learning a lot from all these "check up" comments.

I skipped the Str-Squ part of the syllabus. We'll see how I do in the finals, still work in progress.

 

made a couple of mechanical mistakes... press the wrong button and threw me off the whole day.

 

How have your trades (real, simulated or monitored) go over the last week?

> April was flawless... until last week. I kept on pressing the wrong buttons. (e.g. press "Close All" to enter a stop.)

How do you feel during the trades? Anxious? Nervous? Ecstatic?

> Calm. Very calm even during volatile periods.

Can you 'see' the market as it unfolds?

> yes. I can pick out pt3 very well. Drawing the tapes helped me to refine the entry. The volume/gaussian allows me to anticipate the next few bars.

Where do you continue to see difficulty, and where do you continue to see improvement?

> I tend to forget what to do at CCC or HVS. LOL. Call that alzheimers, but don't laugh; not that I don't know what should be done, but it seems the CCC and HVS can cast a spell on me. I would get so hypnotized by every minute tick that I forgotten to trade.

> I bought a new "HOLD" button. It is working better than the previous one. I think I can use an even heavier duty model.

> being a conservative trader, I do not trade as much as nk, bb or wg. But I think I am ready to step up my entries next month.

Can you correctly use Channels, Gaussians and STR / SQU to correctly anticipate continuation or change?

> channels ok. Gaussian reading is improving. Str/Squ -- I can see the signals coming through. It is definitely helping.

and finally ....

How can I help, or what additional aspects need further clarification?

> you can drop by again.

 

I want to thank everyone who spent time answering my Housekeeping Questionnaire by posting their viewpoints to the Journal, as well as those, who sent me their opinions via PM or email. I appreciate your efforts and consideration. If you have not yet had an opportunity to respond, please feel free to do so. The process not only helps me to 'see' where we need to go next, but also, it helps each individual 'see' where they need to focus in order to make the next step.

I realize many reading along want to move forward and begin to study the DOM and learn how it provides signals for change. Some have already moved into this arena. Before I posted my questions today, the vast majority of individuals who sent PM's, IM's, emails or posted their thoughts about moving forward, felt ready and eager to forge ahead. However, after reviewing the posts from this afternoon and this evening, I see many opportunities for improvement. In other words, while each individual may feel ready, it doesn't necessarily follow that they are ready to move onto the next step.

In addition, It is at this very point (during past attempts at transference of these methods) where the "One More Tool" Phenomenon has manifested itself. I have seen the same sequences develop within this thread as well. Already, I sense many believe, 'If I only had (Insert Tool Name Here), I could improve and become profitable."

Nothing could be further from the truth.

When Jack traded these methods (on hand drawn charts, mind you), he only had the S&P Futures, The DOW Futures, Channels, Gaussians and STR / SQU as his tool set. He did not have 20 SMA, MACD, Stochastics (of any flavor), DOM, T&S, or Tic Charts. As a result, it only stands to reason, that we should be able to do the same.

Therefore, after careful consideration, and after thorough review of many posts and charts shared across the last month, I feel delaying the introduction of the DOM until next month, while at the same time, spending the month of May focusing on the fundamentals required to trade these methods profitably provides the best course of action needed to create a strong foundation for success. I understand some may feel disappointed that we (once again) have delayed moving forward, but if people experience difficulty now, it certainly doesn't become easier as we add the fine level tools. Much better to fix things now, rather than, wait until later.

To that end, I have a request for each of you.

While reviewing many of the responses, I noticed some people had experience in one area, but lacked proficiency in another. Each respondent had different areas of expertise and different areas where they experienced challenges.

Those of you who feel you can easily 'see' things (using one tool or another or all the tools) as they unfold, please take a moment to attempt to articulate why you 'see' the market as you do. If you still have difficulty in one area or another, leave that part out for now. Try to express as clearly as possible how you Draw Channels, Annotate Gaussians, Use PRV, Use YM, Use Str / SQU to assist you to locate the FTT or Point Three. Please discuss areas where you feel you have a proficiency in an effort to help those who have difficulty. If everyone contributes in this fashion, each post provides the assistance needed for another trader. Those of you who feel you cannot 'see' things clearly, please attempt to articulate (as clearly as possible) how you monitor and make decisions throughout the trading day - include how you decide to finally 'take action' on a trade (mentally, for real or on a sim). In this fashion, others who do have an expertise in one area can 'see' how your monitoring and decision making differs from their own. As a result, we as a group can provide assistance to each other in a much more rapid and helpful manner.

Use charts where possible.

Also, if anyone sees something during the trading day they find confusing, please post the time and situation you found challenging as soon as possible. In this fashion, I can focus in on an explanation - similar to Bundlemaker's Chart and Question with respect to Friday Morning's HVS.

Lastly, I plan to review any response made to the 'Checkup Questionnaire' and seek to provide some additional clarity with respect to the areas of challenge mentioned in the individual posts. In addition, I plan to take each area identified as needing improvement and provide examples of correct vs. incorrect use of the tool or annotation, as well as, provide explanation as to how one should use the information. In other words, I plan to reinforce the importance of trading in the NOW, rather than, 'seeing' things after they happen.

I appreciate the patience afforded me by those who feel the time has come for them to move forward with their studies, rather than, undergo a review. It is not my place to point out who should, and who should not, begin to study the DOM. I leave that choice up to the individual trader. However, I strongly believe this delay provides everyone a benefit. Those that help to assist others will definitely see the benefits of the 'See One, Do One, Teach One' Paradigm - as they reinforce that which they already have internalized. Those that need assistance in one area provide benefit to another, while receiving assistance from someone else. Following such a process makes everyone a winner in the end.

Once again, Thank you all for your patience.

Attached, please see the updated Syllabus.

- Spydertrader

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