Mark Fishers - ACD System from "The Logical trader"

Discussion in 'Strategy Development' started by MJUK, Dec 27, 2008.

  1. MJUK


    For those who have not read the book its primary focus is on the opening range and where price moves following the opening range based on the observation the opening is the high/low circa 20% of the time.

    There are other concepts built on top such as pivot ranges and pivot moving averages but the key concept is the opening range. More info here:

    Has anyone used this strategy? Specifically to trade CL? I would like to know if it works. My one criticism is there is little or no information of the historic probability of a trade working if one or more of the indicators are met, which I find absurd if you are supposed to be trading 'logically'.

    I am, however, paying particular attention to it because of who Mark Fisher is in the oil market and Paul Tudor Jones gives it a glowing review in the foreword.
  2. I read it. The answer to the question of why there is no historical data is because the system is not too mechanical and backtestable. For instance, the rule of waiting half of the opening range after A point is broken to confirm it is already quite discretionary. Another one - if price goes nowhere, exit. There's also no explanation how to enter trades when fading failed As. It sounds more like a framework for trading than a mechanical system. It has no edge in itself. Mark says you need to do your own research. For example, you do research and have some ideas about tomorrow you would like to anticipate, thus you use ACD to guide yourself where to enter and exit.

    I tried backtesting it years ago, but it returned crappy results.

    Also, the whole pivot point and "market repeats itself every x days" sounds bullshitty to me. You are right, there's not a single statistical test showed in the book.
  3. MJUK


    Yes I agree about the every X day thing. Maybe certain players have regular orders to buy and sell crude on specific dates and that is what moves the market high or lower on these days but I did think it was crap tbh.

    I think the pivot range moving averages are logical rather than using just the closing price but I don't really like using MA based systems. I don’t need a MA to tell me if a market is trending.

    He also fails to talk about exit strategies – maybe you are right about it being just a framework or confirmation indicator but he does talk about people he has trained using this ‘system’ successfully.

    If this were just some random guy I would throw it in the bin; but when Paul Tudor Jones says it is one of the most important books on trading I know I have to preserve with it.
  4. cgar


    If you have a few more bucks to spend, you should think about getting anything written by Toby Crabel.

    Not his book, but there are articles available from S&C I believe.

    In my opinion those will put send you down a more "logical" path.
  5. I have read both his book and his articles on S&C. There's no real difference between the book and articles. The book = articles + hundreds of pages of tables filled with numbers.

  6. Maverick74


    I have spent the majority of the last 2 years working on the ACD approach to trading. I have taken Fisher's method apart and re-built it to suit both index, stock, and currency trading. I have met with Mark and was going to go into business with him and my business partner to start an ACD mentorship program.

    As many of you know, I run a prop group in Chicago and was getting tired of traders blowing out and losing money. Teaching new guys ACD was a very methodical and disciplined approach to trading. I would not teach guys anything else.

    The mentorship program never really took off because as I discovered it takes an immense amount of time on teach guy to really get them to be a sucessful trader. As the old saying goes, you can't teach discipline.

    I am proud to say the two guys that I really spent a lot of time with teaching the method to, one has turned into an excellent trader who is profitable, the other is a breakeven trader. That guy is a former engineer in his 40's though with no trading experience.

    Over the last two years, my partner and I have spent a lot of time building on the ACD methodology. My partner deserves all the credit for the software he developed for it on TradeStation which I believe is second to none.

    Now before people start asking questions about how we are making it work and what we are doing, let me just say that we have spent way too much time developing this to just chat about it on message boards. I'm not trying to be a prick about it, I just don't want to go into details about it here.

    We chose to just keep it in our office and under our labratory. We have found the best way to collaborate on work of this nature is in person in an office setting.

    I'm very proud of what we have done with it so far. I highly reccomend "The Logical Trader" book. Everything you need to build a sound and robust trading methodology is in that book. As I pointed out before, you cannot simply take the material in that book and trade it. That is not how Mark wrote the book. As he himself told me, anyone that simply reads that book and tries to trade it, will get killed.
  7. Not trying to be dense, but what's the point of writing the book then?

    That's like publishing a book containing a system...then saying..."oh err...if you use this system you will get killed, but I still wanted to write a book about this system and this way you can create a new system..."

    That's great and all, but why publish a book at all?

    I don't use ACD and am not really interested in it, as there are many ways to skin a cat and I don't think his ideas are really any better than what I've come up with for my own trading, frankly. Not being arrogant, just stating that I am confident in my method.

    I have just heard a lot of people say that Fisher presents a flawed system and spends an entire book talking about it, only to say you're essentially an idiot if you use the system as need to write a book then.

    Just slightly confused as to the point of writing the book in the first place only to repeat the same old tired concept that you must create your own system .
  8. Maverick74


    I won't speak for Mark but the book was written a few years back and the market has changed a lot since then. Let me also correct my use of the word system as it's not a "system". I like to call it a methodology or an approach to trading. A system is too rigid with strict rules that simply cannot work in all markets across all time frames.

    An approach is different. An approach is just a basic structure that is setup and allows the user to input their own experience and ideas. Every trader is different. And every trader has their own unique personality. A trader must stay true to who they are and trade in such a way to extract maximum benefit.

    For example, in his book, in the back Mark has trader interviews where they all talk about using the ACD method in their own way which is very different from each other.

    As you know Reaver, there is no such thing as a "formula" or "system" that is going to make money. Even when we think we have a system and can show our own trading results as "proof" that our "system" works, in the end, there is a "Reaver" footprint that makes it work. It might be subtle, or it might be obvious. It's the same with athletes, artists, etc.

    I'm not trying to sell anything here, just giving my two cents. Trading is all about discipline and the ACD approach focuses on discipline. There are many ways to skin a cat as you said.
  9. Just please DON'T get OCD trying to learn ACD!!! :eek:

    :D :p :D
  10. DonKee


    I believe what Maverick74 is pointing to, is that there are viable and valuable concepts to be learned.

    The first 15-30 minute breakout method can be an excellent way to participate in big trend days. The reversal parameters can also capture some huge moves.

    Where so many give up or go wrong is that they are not "wired" to "chop" around for the majority of days just to catch huge moves. Understanding that most markets are in "chop" the majority of time and learning how to give yourself a chance at a big trendng day (or a big reversal) is only one way to capture profits in a market.

    ACD should be a "start" to some of your trading ideas, not the "end".
    #10     Dec 30, 2008