this may be worth a gander for some of you. Joe T traded under Fisher for a long time. Will read this myself when I get a minute. I like what he has to say about risk mgt. http://www.amazon.com/High-Sell-Higher-Buy-Hold/dp/1455500666
What a squeeze today. Vol got absolutely crushed. Shorts got fed to the bulls. Amazing a rally this strong and nothing was breaking out.
So i am reading about this ACD thing first time; and am still reading through the thread and some videos and here is what i am thinking. comments please.. The basic idea is use the breakout out of the opening range to form a bias and trade in that direction. This sounds very similar to any breakout trading (the classical donchian channel breakout for example). Why am i thinking such; cause if thats true its easy to test it out (programatically i mean). actually that would mean that it wont work mostly on markets similar to s&ps as they are more mean reverting than breakout. but atleast it would be easy to quantitatively measure edge. -gariki
Maverick, Question for you. Just trying to understand the methodology. I agree that a lot of things in this kind of methodology are kind of subject to interpretation and not clearly defined. But in general thats a pain. Let me take a specific example. So i am going through this video by Mark Fisher and he takes an example of opening range being 63-73 and he says A value or value above which the range is confirmed to have broken toward the upside is say 7-9cents. Now that would be 80-82. So far so good. Then he says if the price goes to 79 and comes back then its failed to break out. That is where i have a little bit of a problem. This 7 cent to 9cent range is somewhat arbitary and thats ok. But if 7 cents is ok; maybe 6cents also is ok. So when it goes to 79 and comes back to 74-75 the question becomes hard; it can be argued that its a pull back and get long; but he says it failed 80 so i will go short. That rubs. Thanks! -gariki
I do not think it's possible to trade ACD without being a good price action trader. In fact, I don't think any TA works without price action. I just don't believe in mythical forces that once one line crosses another that something magical happens. Doji's, MACD, elliot wave, all that crap, none of that stuff works if you can't read price action in my opinion. As I've said before on this thread, there is no magic in the A levels. They are simply reference points. I know this angers people who want a simple red light/green light system that they can backtest and feel good about but trading doesn't work that way. Trading is all about being uncomfortable. This is why most people struggle with it. Most people can only stand being uncomfortable for so long.
I wouldnt say any TA doesnt work. There are things that you can code up that incorporate some price action based learnings as well. I believe that there is place for both systems and discretionary to co exist. But the question in this particular case for me was.. how can one say that that 1cent is so critical as to distinguish between a successful breakout and a failure (when like you said too..) when there are so many discretionary parameters in question. Thats all. -gariki