Quick ACD trading strategy question

Discussion in 'Strategy Development' started by Hedge22, Mar 14, 2007.

  1. Hedge22


    I have ordered the Logical trader, but not recieved it yet, I was wondering if someone could answer a quick question or two.

    Can you have multiple "A up" breakouts, so if it gets to my A point, then later comes back in my OR, then goes to my A again, does Fisher say that is another buy? Similarly Can u have a 2nd "C up/down" (or E up/dwn?) saying you get a C up but it reverses again later in the day.

    Thanks for the help, i found the first chapter of the book posted online for anyone not familiar with it.
  2. Sponger


    I am making my way through the book right now. Once the A up is established on the day, you are looking to go long the rest of the day - that is, until it isn't.

    Its not a true A up unless the price stays at that level for 1/2 the time of your opening range basis. If it doesn't, an A up wasn't made. If an A up does get made, and it never gets to the C level, you are still looking to get long on the day. It doesn't become a reversal until the C level is breached.

    So yes, it can get to the A up over and over again - but that doesn't mean you won't get whipsawed and headfaked at that level.

    I am starting to incorporate this into my newbie futures trading - it helps because it gives you a framework to look at the market within. The issue, of course, is where do you exit - and that, really, is where the art of trading really begins:cool:

    Nothing is perfect, and I don't think you can actually trade with just this methodology alone - he clearly makes reference to this, plus, several of the traders profiled in the book also say they just use it as a reference in addition to their other techniques. But its definitely got me looking at things differently now.
  3. Maverick74


    First of all, there is no "E". Second, the A levels are not triggers. They are simply levels where you would be bullish above the A up once confirmed and bearish below the A down once confirmed. So no, you can't make multiple A ups and downs as they are not used that way.

    Also, a little fyi for ya, the book is meant to be a guide to forming your own ACD strategy. The material in the book is just the foundation. If you simply read the book and follow it, you will get killed.
  4. Sponger


    Thanks Maverick74 for that response - I had a lot of unanswered questions on the method myself, and you confirmed some of them for me.

    If you don't mind pointing us in the right direction, - is there a reliable public source for the daily and historical pivots, levels, etc.? Do you have to subscribe to Fisher's website to get them?

  5. I tested ACD with historical data (probably only two or three years of prices) a few years ago using Fisher's parameters and it didn't perform well. However, I've been using the concepts behind ACD for years (well before Fisher's book or even Crabel's came out) and they form the core of how I frame the trading day.
  6. Maverick74


    Yes, we did the same. We completely broke it down and re-built the strategy to fit index futures precisely and believe to have bar none the best adaptive strategy to trade index futures. So much so that I'm actually getting an endorsement from Fisher himself. Great guy.
  7. Maverick74


    Daily pivots are easy to calculate. High + Low + Close/ 3

    Then High + Low/2

    Take the 2nd number and add and subtract it to the first to get the daily pivot range.
  8. Sponger


    Bernoulli and Maverick74, can you elaborate a little here- I am trying to incorporate the ideas into a trading methodology.

    You are saying it didn't backtest, yet you use the concepts as the basis for a trading strategy.

    Bernoulli, are you saying that you use an opening range breakout strategy?

    Maverick74, care to explain what you mean a little further by you broke it down and re-engineered?

    Hope you don't mind enlightening me here, I am seriously studying Fisher's method, and I don't want to see something that isn't there, or make more of it when it isn't substantiated.

    Thanks in advance for any feedback!
  9. Sponger


  10. Maverick74


    I'm currently out of town at the moment. I'll answer when I get back.
    #10     Mar 16, 2007