Thanks for this link, interesting charts. Gold appears as the least correlated asset vs. the S&P. So if I were going to focus on a couple markets to trade, it would be those two.
Thanks for the link, nice to have a clear visual. BTW are you talking about markets that you would want to trade intraday? Just curious about your reasoning here...
Thanks for the response. It does add some clarity, and since I don't follow this thread with any regularity, I suppose I missed the example when you first presented it in an earlier post. Your reply leads to a natural follow-up question that comes to mind. However, I had already advised a follower of this thread that I would not disrupt your thread with any further inquiry, which he apparently found upsetting enough to suggest I follow up on my offer and leave this thread alone. And so, not to disturb the Wa, I will abstain from any follow up. I just wanted to acknowledge your response.
My reasoning follows the principle of diversification, where you can diversify by markets, trading systems, and/or time frames. With regard to markets, Gold is shown as having the lowest correlation (closest to zero) as measured against the S&P 500 index. So trading Gold and the S&P will provide more trading signals that are independent of each other (keeping in mind that even two price series with a correlation of zero will move in the same direction half the time). The high correlations across most asset classes that we've seen in recent years has largely nullified traditional diversification approaches by style, sector, and asset class. Globalization and the popular use of indexed trading instruments has resulted in most markets moving in concert. That's when we stopped talking about diversification and started talking about risk-on and risk-off. You also asked about intraday trading. Timeframe is another dimension of diversification that can be applied to the same market. So in a high correlation environment, that's another solution to diversify - trade the same market in different timeframes. It's kind of a mind bender to be long on the daily and short on the 5-minute. But that's not too different from the portfolio of a daytrader who also has an IRA/401K retirement account.
Hello everyone. I have read Fisher's "Logical Trader" lately and then stumbled upon this thread. Have a question to everyone successfully employing ACD/Pivot range techniques: Did I understand it correctly, that ACD is not some kind of a mechanical trading system, but rather a set of support/resistance levels/ranges, used as a framework to base entries upon, while using other aspects (such as fundamental context, price action et cetera) to fine tune entries? Thank you in advance.
A levels are not support or resistance areas. They are volatility levels. And ACD is not really meant to be a mechanical system. But then again, I don't really believe in mechanical systems. If you read this thread, you will get all your answers.
Thank you, Mav. I read probably last 30 pages and all your posts YTD, got a bit lazy to read the whole thread, though. You confirmed my thoughts about the ACD. I never had success with purely mechanical systems myself too. As for the term "support/resistance range" I adopted it from M. Fisher's chapter related to pivot range, where he calls it exactly that (S/R). Guess ACD range acts differently (being volatility levels). Will invest some more time in reading the thread.
Hey Mav, I'm not a troll, I'm a lurker. A lurker is not a regular board poster, but when we do post we are polite