The Dawg Pound

Discussion in 'Journals' started by dawg, Mar 20, 2003.

  1. dawg


    Creating this so i can keep track of my version of hershey style of trading. Started posting trades in the "stochastic indicator' (GASP!) and wanted an easy place to keep track of them. And i (and others) can get an idea of what type of performance one could expect. Although i have tracked it for several weeks (profitably) I will start with this week(tuesday) to keep it simple on myself.

    If anyone is interested... what bastardized version of the hershey sytem will i be tracking? First, I am not claiming this to be the EXACT hershey method. Lets' track this and see where it goes. I really don't know what to expect.

    Indicators: stoch 14,1,3 macd 5,13,6 and volume (so called beginner style)

    Type of Trades:
    1. Rockets

    2. Looking to add macd xo reversal

    Stoch 14,1,3 w/ 75 trigger
    wait until the close of the 5m bar
    LONG SIGNAL if it's above 75 and enter long on a break of that bar's high


    there was a MACD Hist of +0.40 or better (doesn't have to be in the same bar could be earlier)

    SHORTS are just below 25 and -0.4 on the histogram.

    I genreally avoid trading during lunchtime hours as volume usually sucks.

    What about EXITS....i look at several things for exits:
    -chart formations
    -stoch readings
    -macd xo

    Any comments are welcome.

  2. dawg


    Well returned from vacation and today really sucked.

    I am going to start fresh and just take it like a beginner. As always, feedback is welcomed.

    My beginner trade ENTRY criteria both lines above 75 or below 25 and a MACD Hist reading +0.4 or -0.4.

    Exit: look for stoch above 25 or below 75...also look for MACD XO after a rocket is entered for my exits. (if this is diff. than anything jack has said please let me know-thanks.)

    Also, working on putting 1-2-3 pts together to keep from getting shaken out when stoch barely gets below 75 or 25 after a setup and then in progress.

    Here are my trade signals for today:

    1. (a) 9:50 stoch(9.68, 26.88) MACD Hist: -0.72

    - maybe a little picky but wasn't below 25 so i waited....

    (b) 9:55 stoch(5.13, 15.69)

    - good signal. looking for short on break below low of bar...never happened NO TRADE.

    2. 10:25 stoch(89.74, 77.78) macd hist: 0.85

    - good signal. looking for break above high of bar...never happened NO TRADE.

    3. 12:00 stoch(15.00, 22.79) macd hist: -0.5

    -good signal volume low (5,138). looking for a break below low of bar....never happened. NO TRADE.

    4. 12:30(15.00, 23.33) macd hist: -0.09

    -not sure to think of this signal as a continuation of the prior failed rcoket b/c there was no GOOD MACD HIST reading and volume was pathetic....either way did not break below low of bar. NO TRADE.

    5. 1:00(93.75, 75.83) 12:50 MACD hist:+0.4

    -volume again was low. entered on break of high of bar 863.00. 1:20 stoch(73.68, 78.95) and 1:25(73.68, 75.44) macd was prezeling and volume stinking and fed looming i exited flat

    long: 863.00
    sell: 863.00
    p/l: 0.00

    6. 2:00(3.85, 14.14) macd hist: -0.71

    -right before fed, but never broke below low of bar so NO TRADE.

    7. 2:25(6.25, 21.31) macd hist: -0.60

    -entered on break of low of bar 858.25. 2:35(41.67, 17.82) exited when high of this bar was taken out at 861.75.

    short: 858.25 day: -3.50
    cover: 861.75
    p/l: -3.50

    8. 3:45 there was good stoch signal but no macd hist signal until 3:55 bar.

    2 trades -3.50 total. 1 loser, 1 flat.

    today felt very difficult.
  3. dawg


    My trades and thoughts on today:

    1. 11:05 bar stoch(15.79, 21.14) macd hist -0.5 low of bar 865.00 ---->SHORT SIGNAL (below 25 on 14,1,3)

    with the low of day right below 864.50 and today had been a range day so far. I waited until the low of day was broken.

    Short @ 864.25 11:11
    Cover @ 861.25 12:01 +3.00

    day: +3.00 last 2 days: -0.50

    from 11:40 to 12:00 volume decreased significantly 5m macd xo at 11:55. with the minisucle vol and xo i exited BEFORE the stoch crossed back above 25.

    2. Now this one is a least for me

    2:10 stoch(13.04, 27.88) macd hist: -0.44...had me on alert for a short , but then the next bar

    2:15 stoch(13.04, 20.46) but no vol (3188) and never broke low of bar so NO TRADE ENTRY, BUT i was now on the look out for a REVERSAL trade based on a potential MACD XO.

    failed rocket setup ---->macd xo long

    2:25 5m MACD XO volume picks up AND a price thrust got me long at 866.50

    held as this trade as it turns into a rocket. we then get the vol/price spike at 2:45. and then vol drops off significantly...i wanted to look for a point 3, but with a good profit i checked out at 871.25 @ 3:03

    point 3 shows up at 3:10 to me.(i have been struggling trying to get these down..curious what others did)

    long 866.50 2:31
    sell 871.25 3:03 +4.75

    day: 7.75 last 2 days: 4.25

    the second trade is definitely not a beginner trade, but is a trade jack has talked about: reversing out of a rocket into the opposite direction on a macd xo.

    anyways attached is my chart of today's action with my trendlines.

    Attachment: es 5m chart.jpg
    This has been downloaded 32 time(s).
  4. dawg


    1. 9:45 stoch(18.18, 20.20) macd hist -1.0 low:866.25 (also low of day)

    entered on break of low. red bar green bar drop was a little nerve wracking. the 10:30 bar was a bullish engulfing-type (although light on the vol) bar and 5m macd xo and broke my downtrend channel so i exited. (see chart)

    short @ 866.00 9:47
    cover @ 860.75 10:34 +5.25

    day: +5.25 last 3 days: +9.50

    side note: if you reversed long on the macd xo as you exited the rocket you again got a very nice trade - it eventually turned into a rocket. (i think there is a lot of potential in these type entries)

    2. 11:05 stoch(77.05, 82.12) macd hist: +1.49 high: 872.50 (also high of day)

    never broke the high so NO ENTRY.

    side note: the macd xo at 11:30 ended in congestion. also formed a bull flag.


    3. 1:15 stoch(96.88, 81.31) macd hist +0.55 high: 875.75 (also high of day)

    entered on break of high 876.00. mkt was making new high but macd was not (diverg.) volume was not strong for new highs (especially for new highs of this recent bounce) 1:55 5m macd xo...exited on bounce at 876.75 .

    long @ 876.00 1:20
    sell @ 876.75 2:00 +0.75

    day: +6.00 last 3 days: +10.25

    side note: again on the macd xo if you reversed from you rocket this was another good trade as it eventually turned into a rocket.

    4. 2:40 stoch(12.00, 24.00) macd hist -0.47 low: 873.25

    entered short on the break at 873.00. 2:55 bar had crappy volume and 3:00 was a reversal. 3:05 macd xo exit at 3:12 @ 873.50

    short @ 873.00 2:47
    cover @ 873.50 3:12 -.50

    day: +5.50 last 3 days: +9.75

    side note: again if you reversed from you losing rocket in to long at macd xo you had another ok trade as it turns into a potential rocket that doesn't set up.

    3:30 had a long signal but it never broke the high so i did not enter

    attached is my marked up chart for the day

    Has anyone else been looking at the macd xo reversals from rocket endings and failures?
  5. dawg


    cable went out for several hours midday so i missed the big midday runnup.

    my review:

    1. 11:10 s(10.34, 23.74) macd hist -.73 low 876.50

    this was low never broken so NO TRADE was entered.

    note: the action of the 11:15 reminded very much like the action on tuesday at 10:00...we got a short signal at the low of day and the next bar was a lower volume inside green bar that led to good reversal...again volume drying up being a key and was followed by a macd xo. both led to good reversals.

    also the sequence was failed rocket from low of day---->macd xo ----->potential rocket zone

    also after the big midday runnup the macd xo marked the beginning of a downtrend channel which lead to a potential rocket setup.

    2. 1:45 s(3.45,16.76) macd hist -.56 low 886

    entered on break of low of the here some people might differ on what to do. mkt bounce and stoch left the short zone, BUT was still within my defined downtren channel (see chart) so i held as i was looking for my pt 3. i would have exited had the downtrend channel been broken or the macd xo....reverses off the top of channel and stochs reenter short zone. ok we get ANOTHER short signal at 2:15 s(8.33, 23.55) and that same sneaky low volume inside green bar shows up AGAIN. so when the high of the 2:20 is broken i am history at 856.00

    short @ 885.75
    cover @ 856.00 -0.25

    day: -0.25 4 days: 9.50

    note: again the macd xo off of the failed rocket lead to a trend move that lasts the rest of the day. actually turns into a rocket.

    3. 2:50 s(96.00, 85.62) macd hist +0.67 high 890.50

    enter on break of high. again stoch spikes briefly below and someone sticking to the letter of the law might exit, but this is the first red bar of this entire trend move (i.e point 3). held to end of day and exited at 894.50

    long @ 890.75
    sell @ 894.50 +3.75

    day: +3.50 4 days: +13.00

    very happy with the week w/ only 4 days of trading for me (w/ missing monday which had a big trade and today's midday move) and all this war crap. have a good weekend.
  6. dawg


    1. with the large gap the stoch opened well into the short zone, i noted the low of the first 15 minutes and got short on the break.

    short @ 873.25 10:01
    cover @ 868.25 10:52 +5.00

    day: +5.00 last 5 days: +18.00

    10:45 had a low volume inside green bar(which has been vodoo lately) and when the down trendline was broken. i exited. (see chart) i also attahced my 1m chart with the channel for the down move.

    we then had a trend channel for the middle part of the day...did two wash trades...nothing notable other than recognizing the channel. (big whup)

    2. 2:45 s(100, 89.86) macd hist +.59 high 866.50

    long on the break at 866.75...stoch did leave buy zone, but stayed within my defined trend channel (see chart). Then at 3:15 low volume inside red bar (another vodoo bar) exited on macd xo and break of my trend line at 865.25.

    long @ 866.75
    sell @ 865.25 -1.50

    day: +3.50 last 5 days: +16.50

    3. with the rocket failure of the previous trade i reversed my position on my exit and took a short position with macd xo after a rocket failure. trade turns into a short rocket at 3:35 s(0.00, 21.52). But 3:45 we get a good volume bullish engulfing bar. When the high of this bar is broken i eixted at 865.50 for a small loss.

    short @ 865.25
    cover @ 865.50 -0.25

    day: +3.25 last 5 days: +16.25

    in general, not much of a day after the morning move...midday brought a good channel (not my area of success thus far) and late day was fairly whippy with a few small losses. 4th positive day in a row, so happy with that.
  7. dawg


  8. dawg


    1. failed rocket--->macd xo--->rocket

    10:15 s(14.81, 22.22) but NOT a good macd hist reading of only -0.34 so i was in short alert mode and then the following happened...10:20 had an increasing volume reversal bar, the stoch moved out of the short zone(failed rocket) and then at 10:35 we had a 5m macd xo.

    So i got long at 864.75 on the 5m macd xo. This eventually turns into a rocket signal at 10:50 s(81.82, 76.24) macd hist: +0.72 that sets up at 11:00. ride this until 11:35 where we get the low volume inside red 'vodoo' bar....while i as definitely conflicted feeling i was bailing early, the next bar was a 5m macd xo but still within up-trend channel.

    long @ 864.75
    sell @ 872.75 +8.00

    day: +8.00 last 6 days: +24.25

    2. rocket failure--->macd xo--->doh!

    2:00 s(17.65, 25.88) 1:55 macd hist -0.40 low 875.25

    low was not broken so NO TRADE, but i was on the lookout for a rocket failure----->macd xo trade again.

    2:20 5m macd xo and entered at 877.75...also broke smaller downtrend channel (see chart) mkt reveresed and had another macd xo and i exited at 874.75. DOH!

    long @ 877.75
    sell @ 874.75 -3.00

    day: +5.00 6 days: +21.25

    3. short rocket

    2:45 s(0.00, 7.41) macd hist -0.72 low 872.75

    note: look at a 15m 2:30 bar - big fat bearish bar on increasing volume.

    short on the break lower @ 872.50

    we get a big vol spike (21,663) at 3:15 and some up movement on lower volume. 3:20 stoch is outside og short zone but withing downtrend. 3:25 macd xo and things are looking about over, but since we made a new low for this move i was drawing in a channel that wan't as steep with a new point 3(see chart) also by 3:30 we have a big 15m reversal bar formed and i put my stop at 871.75. disappointing being up 5 and only making 0.75 but i was trying to stay with the trend.

    short @ 872.50
    cover @ 871.75 +0.75

    day: +5.75 6 days: +22.00

    note: you could have reversed at 871.75 w/ a rocket end---->macd xo (and a 15m reversal thrown in) 871.75 which turns into apotential rocket setup at 3:50 and close at end of day at 874.00 +2.25.
  9. Woody


    Hey Dawg, I am enjoying reading your journal. It takes a lot of work to post all the details like you are doing. The charts make it very easy to follow. Keep up the good work.

    Are you paper trading the system or are you trading real money? Seems like you are doing quite well if you are trading real money.

    I find your charts especially interesting because I have noticed that I have entered trades in some of the same areas as shown on your charts. The interesting thing for me is that I do not use any indicators on my charts.
  10. Woody


    I have not followed Jack Hershey's posts, so I don't know what the signifcance of that is. Is this supposed to be a special set-up or just a different trade signal?

    I was also wondering what you are doing to exit trades that go against you. Are you using a fixed stop loss or some other signal such as the MACD cross?
    #10     Mar 26, 2003