Believe it or not, all the questions you are asking are answered on this thread "somewhere". I know it's long, but the material is good. There is not a lot of clutter on this thread. I think a lot of people on this forum are transients. They are just passing through. Many went to a trading seminar or bought a book, found this site, found this thread, stayed for coffee and left. If you are allergic to hard work you will quietly leave out the back door. LOL. There is nothing easy or quick here. Many people have asked me why I don't charge for this. Charge for this? Are you kidding me, lol, I wouldn't get a penny. Telling people it will take years and years of hard work and long hours of data analysis. Hell, people would pay me not to tell them how this works. LOL. Which leads me to another common question that pops up here. OK Mav, so you are just giving this away, nobody does that. Well, no more then telling people the secret to becoming a Doctor is 7 years of medical school and 5 years of residency. LOL. That's usually the part when a student decides to change their major to Marketing. Very few people are going to do the work. There are no secrets here. People use to get caught up on the "secret A level measurements" or the "secret way I score NLs", only to discover there is no secret, it doesn't matter. At the end of the day, it's just a lot of hard number crunching and analyzing the data.
thanks, but there is no evidence that it really "works", Who wants to give years away to find out ? A doctor you know what you are going to accomplish, end goal
You asked the question why there seems to be such a high turnover of posters on this thread. I think you have just answered your question. I think the big point most miss is if you put in the effort, ACD gives you a structure around which you can build a trading system. Let me elaborate. If you've read Peter Brandt's book, and his blog, you will know he trades classical chart patterns. Now there are two basic problems with his chosen path. First, it is statistically proven that most breakouts fail, and if you trade a chart pattern, you are trading breakouts. Second, the whole world can see the Head and Shoulders breakout you trade, so big fish feast on easy pickings. If you read his blog, you will see that he openly says chart patterns do not provide an edge. His edge is trade management, and he makes rich profits with less than 50% win rate. All that chart patterns provide him is structure. ACD is a lot more subtle and nuanced than chart patterns. You get a tell before anyone else can see it. All you need to do is understand it well and build a system around it. I'll drop a nugget, but I'm just doing what Mav did before. He said he mostly leans on NL Derivatives nowadays. If you trade options, you would understand 2nd and 3rd order greeks. If you (not you personally, readers) haven't studied and traded options, but you understand physics, or at least basic English, this will help you. https://en.m.wikipedia.org/wiki/Jounce Early in this thread, Shan wrote about the 5D NL rate of change. That is a derivative. Nobody seems to have picked up on that, apart from Robert Yanks, who indeed reminded me of it. These damned derivatives will always make me laugh, because I spent a few months working on them. Data crunching 5 days a week, thinking about what to do next every waking hour. Why do I laugh? Malls here have banking zones. One fine day, deep in thought, I walked into my bank and got a queue number and took a seat. After a while, I looked around and said to myself, wow, they've renovated the place since I was here last month. Then I saw the logo and realised that I had gone into the wrong bank because I was so deep in thought. Yes, it's an obsession. Maybe some are gifted. I envy those who can read charts so well they don't need any prep, they trade the same instrument every day and harvest money just like playing a video game. There is a Japanese guy who does that, I've posted about him elsewhere. Alas, I don't have that talent, so I have to work for what I get. I don't post so much on this forum nowadays because I'm tired of the idiots who say there is only one way to trade, their way. Reality is, unless you are supremely gifted, what you need is structure. The best data analysis will not give you a 100% win rate, not even 90%. But it does give you two things, or at least it gives me that. One, a structure I can trust. Two, directional bias you often can't see on a chart, again, that I can trust. Trust came from experience. If you disagree with all this, it's fine. Every time I write, I hope it will make sense to the many people who lurk here but don't post. I don't seek to persuade any individual. In the same way I have benefited richly from Mav and all the others before me, I hope I can shine a bit of light for those who came here after me. Cheers.
Hi thanks Care to elaborate, the derivative of options particularly theta and gamma, hard to model in past tense, tough enough to see what Vol., looked like in the past... what am I missing, ty Although if Vol is high so will theta and gamma ... ?
It's the concept, and since I believe you trade options, you will understand it. Gamma expresses the rate of change of Delta along the curve, as you know nothing is linear in options. So too for the third order greeks. Use the same concept with ACD. You will be amazed at what you will see. I think I have elaborated enough, certainly more than Mav has, but all I've done is connect dots you will find on this thread. Read it carefully. It's a gold mine.
Concept and structure. Before I stumbled upon this thread, when I was making my futile effort at day trading the ES, I was doing statistical analysis about what happened when the opening move was 1 stdev in a particular direction, 2 stdev. You'd be amazed at what you find. When I gave up trading the ES, I spent 4 months watching CL and plotting every intraday swing in Excel. You would be amazed at how consistent the pullbacks were from a 20 tick move, a 30 or 40 tick move. I established that if the 20 EMA was broken by more than 14 ticks, statistically, with a >90% probability, there would be a change of direction. That told me where to set my stops. This is all a few years old, so you can't use it anyway, just the concept. I didn't end up day trading CL. It's fundamentally against my temperament to day trade, and as an old timer said, something is always trending, so I have a basket of instruments I track. In any case, I then stumbled upon this thread, and the rest is history.