Back to the Futures: A Question for Jack Hershey
James Fowler & Harla Yesner
It's been a while since I have lurked in these corners: I have been
playing with my new baby boy.
In the interim I was hoping that Jack might come closer to helping us
verify mathematically that his system for futures trading works. But a
quick search of the archive disappointed me:
Jack Hershey wrote on 12/04/2000 in "Re: sine wave":
... Thus you can see numerous points at which my views and approach
cannot withstand any rigorous mathematical tests. I have made a simple
practical choice to make a lot of money instead of prove something
mathematical. I have chosen to apply mathematics in application after
application where it is not possible to mathematically link the
applications....
I don't understand why it's not possible to verify such a successful
futures trading system if it is based on objective rules. My own
attempts to automate the system have been frustrated at every turn by an
enormous problem that is apparently only resolvable by gut instinct:
when to let it ride. Jack gives instructions sometimes to get out at
congestion, but other times this congestion may really just be a
temporary jumble before the market continues its previous direction. Of
course, if we move to a higher fractal, this jumble won't look so much
like a jumble and we can ex post justify a decision not to sideline.
But I cannot figure out an objective system for determining ex ante
which fractal to make decisions on.
Jack apparently has great success in determining when to do this by
knowing the operating point of the futures market and having this
objectively linked to what time periods to use for his analysis. He
also persuasively describes how he does this. But in no systematic
application of his advice can I ever get the right results. In
simulation after simulation I have struggled to do everything he says,
every permutation of what he says, and I can never get the system to
offer up the results to which he says we should aspire (eg 30 points a
day on DJXX).
Please, Jack, you are trained in physics and engineering. You know that
if there is no mathematical solution that you should be able to use math
to prove this as well. Can you give an intution of how we might prove
your contention that "it is not possible to mathematically link the
applications?" Or could you clarify?
I have spent a great deal of time respectfully reading and thinking
about what you have written, but mostly what I feel now is frustration.
That is probably my own fault, a result of my own limited capacities,
but I thought I should express this since I am definitely not the only
one who has been enthusiastic about your posts and then hit a brick wall
once we tried to apply them in a rigorous way.
Sincerely,
James Fowler
http://www.people.fas.harvard.edu/~jhfowler/
Don Cameron
<james_...@harvard.edu> wrote:
>Hello all, Jack,
>
>It's been a while since I have lurked in these corners: I have been
>playing with my new baby boy.
Congratulations. Enjoy them while they are young - much more
rewarding than playing the market.
I have also spent a great deal of time studying and analysing Jack's
thoughts on both the stock and futures market - literally hundreds of
hours. I have tried to apply them to the stock market. I have
experienced similar frustrations in trying to relate to the way Jack
tends to present stocks as flowing with clockwork-like precision
through a sequence of conditions that allow one to step in and out at
the approprite times while pocketing major profits. I am refering to
Jack's 0-7 scoring sequence, which I have been unable to replicate
with any degree of reliability.
I think (and I could certainly be wrong) that it is just part of
Jack's style to present as absolutes things that the rest of us see as
rather fuzzy. Does this bother me? Not a bit and I'll tell you why.
I started short-term on-line trading of stocks about a year ago. I
used a variety of approaches initially and for the first 7 months of
the year fluctuated around my initial stake +/- 15%. Then I started
focusing more and more on the application of Jack's qualitative
principles and dropping the other set-ups. The result is that my
account went from -7% at the end of July to +50% today, while the
market was going down. I know that the results cover too short a time
to be conclusive, but they are very encouraging.
Like a baseball batter who does not swing at every pitch, I do not
take every Hershey-type trade that comes along. I do not rely
exclusively on Jacks cast-in-stone rules for getting out and I allow
overall market conditins to influence my judgement on individual stock
trades. But maybe, just maybe, after hundreds of hours of studying
how stocks behave within the quatitaive stucture of Jack's approach I
am beginning to acquire some of his sixth sense in knowing when and
how to act. That's good enough for me if the current results are
indicative.
I would like to publicly thank Jack for opening my eyes. I suggest
that rather than continuing to struggle for a mechanical system you
devote your efforts to carefuly watching the day-to-day behaviour of
the markets in an effort to develop insight on when the guidelines
(rather than rules) are operative and when they are not and when one
fractal rather than another might apply. I also believe that having
real money on-the-line helps sharpen those instincts. It certainly
focusses my attention in a way paper-trading never could.
My conclusion is that this is not an exact science and it is not
necessary and possibly futile to try to make it one. However, a valid
operational framework such as Jack presents is a hell of a good
starting point.
server not recognized
Ever tried to fly a plane in severe turbulence, call the tower, find the
runway, miss other aircraft, calm the passengers check the map and scan the
instruments?
Easy.
Just go through the routine.
However try and program it. Much you can program but at some point the
pilot is in sole command and responsible for everything. I suspect
experience with Jack has become intiuitive to some degree to know when to
execise judgement and over ride the controls. I suppose its important not
to make too much a habit of it. Sometimes those plummeting ROC and
cartwheeling gyros are telling you something even if your sense of
equilibrium isn't.
P
"Don Cameron" <donald....@sympatico.ca> wrote in message
news:i7nm3t0htmbf4fa44...@4ax.com...