Home > Technical Topics > Technical Analysis > The ACD Method

The ACD Method

  1. Purchased, read and have traded this method developed by Mark B. Fisher from his book titled: The Logical Trader: Applying a Method to the Madness.
    It made since to me which is why I use it to trade with. Wasn't very successful though, but I believe this is due to several factors: (1) my broker - not having the time to trade the way the method is suppose to; (2) I think he has too many accounts to follow, (3) he was more interested in trading the ES market and I tend to follow the grains.
    Any body else use it or know of it? Successful or not? Thoughts about the method?
    I'm thinking I might have better result if I make my own trading decisions and begin trading online.

    Thanks.
     
  2. I don't see how this could work with a broker. You pretty much have to watch it, I don't see how someone could do that while maintaining other accounts.

    Get yourself an account at IB and paper trade it for a month and see how you do.
     
  3. cunparis
    Thanks for your reply.
    I have been trading the method on paper for two years and have about a 70% success rate (100% is better of course, but no method is 100% successful every day) with it. So when I went to trade it live through a brokerage firm I noticed that the IB that the brokerage firm introduced me to wasn't achieving the same level of success as I had been achieving trading on paper on my own. As a result my trading account funds now is extremely low and have halted trading all together while I regroup.
    I looked up IB on the internet, and I don't have the account minimum to open an account due to the above, so I am sort of stuck on that front.
    I believe the method works, but since I work full time I don't have the time to watch and trade as the method requires, again sort of stuck there too.
    Thoughts, ideas and suggestions are always appreciated.
     
  4. ACD is my favorite, i have been using it for the last 10 months. It takes awhile to get used to it and understand all the layers that fisher talks about. However it is by far the best trading method i have come across. ACD works better if you use it on the markets that fishers firm uses it on. However one thing i noticed is that when the signals occur you have to take them and follow the method to a t. I have read the book at least 5 times and learn something new everytime. The thing is that you have to learn 1 thing completely and then go after the next and so forth. It is built upon layers and to understand all the layers does take some time. plan at least 6 months to get good at it.
     
  5. does anyone or would anyone care to discuss the order flow

    and slippage that the followers of this method cause

    on a daily basis with their nonsense ?

    ( of course it is not nonsense but if blindly following the method causes price to run amok like then the only way to fade it is using this )

    www.scenta.co.uk/_db/_images/green_shoots140.jpg

    and to enlist the powers of this gentleman who does not like to see retail specs get creamed by the funds using OPM

    www.youtube.com/watch?v=s1C8d2qZrbA&feature=related

    :cool:
     
  6. Hi Dirkd, thanks for sharing your experience with ACD. It's good to get a confirmation from someone using it.

    I just finished the book and there are a lot of layers. I wrote a simple indicator to plot the ACD values on my chart. If you're trading CL, would you mind sharing your current opening range timeframe and A &C values? I'm not sure if I should use what's in the book or use a multiple of the average range.

    I've done a bit of backtesting on just buying on the AUp and Good AUp. It's close to breakeven. I'm using a 5 minute OR and I'm wondering if there is a better value so I plan to test this. I'm thinking one needs to add all the layers in order to be profitable. I didn't expect buying on AUp to be profitable I was just curious what the results would be. I learned a bit from studying the past trades.
     
  7. ACD works great with CL but CL is not something you want to start with when learning ACD. The opening range is 45 minutes with an A value of .08 cents and a C value of .13 cents. I would simtrade CL if thats what you want to trade for at least 2 months. Then keep reading the book as you will need to read it at least 5 times. ACD is just the beginning you have to understand the other layers fisher talks about to really use his system the way it was designed.
     
  8. Thanks for your reply. My plan is when I get back from vacation next week to start acd using simulator of course. I already day trade ES but I only get a few trades a day so I was thinking I'd have enough time to monitor CL.

    I was using 5 minutes for my OR which I read in the appendix of the book. I will try 45 minutes. Also I was skeptical that 8 & 13 would still be the good A & C values because oil is really volatile right now. So I was trying to tie the A & C to volatility. Searching the net showed that some are using a percentage of the Average Range. So I took the 8 & 13 and divided by the AR in dec 2001. I don't have the value handy but I think it was around 12% for A. I want to test out more ideas with my strategy and then test them out live.
     
  9. when it comes to the OR(opening Range) fisher updates his numbers every now and then so i think when the book was written it was as the appendix sais but now it has been changed to the 45 minutes. The A & C values are current and should not be messed around with. Stick to learning the basics of ACD and keep adding layers after you understand them. ACD only works when you have knowledge of all the layers, that is the key. Until you have an understanding of every indicator you will have many false signals and won't be able to understand why you got stopped out. I rarely let my stops go as far as ACD dictates because i now use maybe 5-7 of fishers indicators and only when they all align do i max out my trades. It is a difficult system but one that is excellent once you have mastered it. I have spent 10 months every day working on it and i am still learning every day. Just yesterday i had my first D signal. lol. You will start to see the signs of ACD once you master the layers.
     
  10. I forgot to ask, what which commodity which you recommend for learning ACD?
     
  11. ES actually works pretty well with the ACD methodology. Fishers main markets are the energies, ES, and ZB. I think for a beginner all these markets move too fast for someone who doesnt have a strong grasp of the method. I would recommend the ZN which is basically a slower version of the ZB. The ZN doesnt follow the ACD as well but it is a good market to start off with. Once you have an understanding and have some time sim trading i would say the ES. But at that point you could really trade the ES, CL and ZB with the ACD method.
     
  12. I've read that it doesn't work so well with ES. :) I already trade an ES system every day so it'd be very easy for me to do ACD with ES and save me from adding another market.

    Thanks for the suggestion.
     
  13. Very good book.

    If you can find out std deviations and mean for ORs,you will find it more useful.
     
  14. So no one has had lots of experience with ES and ACD? I read the book once, does seem very 'logical', but slippage seems high at times. Maybe I haven't absorbed the system yet, but the breakout values he talks about often seem to reverse quite substantially in volatile markets, so unless you're highly leveraged, it would be difficult to sit and wait out so much slippage, no?
     
  15. The ACD method works very well with index futures. You just need to fully understand what the ACD method is about.
     
  16. Can you explain more about it? I read the book but I don't get how to calculate the ACD values.
     
  17. Using 20% to 25% of either a 5 or 10 day ATR is a good start for both the A and C values.
     
  18. Take a look at Gold today, Good pivot A' down. Only to come back up through the pivot high range.

    Question is if you take the short at the A' down in half the opening range timeframe, probably around 117.00 low was only 113.00 stop was top of pivot at 119.00 area.....
     
  19. Also, is the ATR a good proxy for profit target ?

    Thanks
     
  20. You don't get short at the A down. You have a short bias...big difference. You still have to trade the product. The A level is not some magical level. It's an expression of volatility. ACD is all about volatility, time and price action.
     
  21. Yes it is along with price action.
     
  22. I am only trading ETFs . Will ACD method work with stocks, ETFs or ETNs. Thanks . If so I will buy the book. Replies much appreciated
     
  23. Works with everything. Stocks, bonds, commodities, ETF's, currencies.
     
  24. Thanks so much. I have also ordered the book.
     
  25. Mark Fisher will be on Fast Money today fyi.
     
  26. I happened to be channel surfing and ran across his interview. He's as sharp as I remember him.
     
  27. If you did around Traders Laboratory someone saved presentations done by Mark. Its been awhile since I have seen them.
     
  28. I think this is what you're talking about. I watched maybe 3-4 of these. The quality is bad, you can never really see what he is doing on the screen, but you might be able to pick up on his method through his explanations.

    2nd post: http://www.elitetrader.com/vb/showthread.php?threadid=186544
     
  29. i want to trade SPY using ACD method. How do I get ACD values? I have to calculate opening range. And after that point A. The book does not describe this procedure. This is based on proprietary research which Mark Fisher will not share. Help much appreciated. Thanks
     
  30. The A values are not proprietary. The ACD system is all about price action. There are no secret numbers or secret values. The important thing is that you understand the ins and outs of the system and why you are choosing the values you are. ACD is volatility based, not price based. It's all about volatility and price action. That is why it's so effective.

    Some general advice though. Regarding the opening range, you will want to set that time based on your trading style. If you are more a counter trend trader, you will want to use a wider opening range. If you are more a breakout trader or momentum trader, use a narrower opening range. Good luck!
     
  31. By all accounts he's an approachable guy. Drop him a line. His addresses are on the Web, mark--at--mbfcc.com or info--at--mbfcc.com
     
  32. Thanks. On page 12 of the book, Mark states as follows

    " Based on this opening range, the A point to enter a long or short position is plotted above or below the opening range, based on set of variables. These variables are based on our own proprietary research, the process of which i wont share with you"
     
  33. Thanks , I was trying to find how I can contact him. I appreciate this contact info.
     
  34. Osho, look, he said primarily because they change their A values constantly. The book was written like 9 years ago. Whatever A value he could have put in the book, he would have changed them 100 times since then. Markets change and your values have to reflect that. I think he used a poor choice of words there and he admitted to me so much in person. It was never to imply it was a secret number.
     
  35. He calculates the values based on a % of the ATR, so it does constantly change, just not by much usually.. You can get a free 30 day trial to his material through his website, you can start by using that to get a feel for how its calculated.

    I have been using this method for both stocks (I wrote a spreadsheet to calcuate teh values automatically by getting the historical open, high, low, close), and emini's. Seems to work pretty well, but like Mav said there has to be volatility.

    Also you still have to trade it correctly, you can't just pay the offer at the Aup or hit the bids at the Adown, its just your trading bias as long as it spends TIME above, below those values.
     

  36. I found this quote on their web page.

    " A good approximation of the current "A" value for any stock, would be to take 30 day average range (h-l) and use 20-25% of this value. This is quite confusing to me .Can you help me please- where can I find h-l values for 30 days ? This much appreciated. Thanks
     
  37. Just create an excel spreadsheet. Osho, again, please don't put so much value on absolute levels, trading does not work like that unfortunately or we would all be billionaires. There is a lot of software out there that will calculate ATR's for you. In fact it is standard on just about every retail platform.
     
  38. Agreed, you can just create and excel spreadsheet that will grab the data from the historical page off of Yahoo finance. FWIW I have had to change the % from time to time, because of my trading timeframe. Also personally I play inplay stocks, and the risk that he would give is much more then the risk I give. If a stock makes an A up and I get in at a good price, I won't give it to B as he suggests (because the OR is usually larger then normal if the stock has news, earnings ect..), again its just my bias for a trend at that point. The trades I find most effective are the rubberband trades, Lateday Pivot C trades, Pivot first hour high/low. I also try to pay attention to where I might catch people leaning the wrong way (Mav has posted some good videos with Mark where he explains that), thats mainly in my emini's though.

    Again its just a bias though for a trend. (Mav you know way more then I do about ACD, so please correct me if I'm wrong)
     
  39. Yes, I trade the ACD on individual UK stocks.
     
  40. i am studing the acd method and i have a few questions.
    1) about the opening range mark says that you must find the domicile market of you what to trade to be valid. i guess for exampe when you trade usd/gbp he means the time that london stock market opens. if you trade metals or energy on nymex what is your opening range?i found that open outcry for crude oil is 9:00am est time. is it valid if i use open outcry for metals or energy i trade? i normally use the first 15 mins.(i dont know if that is correct)

    2)i am also confused on how to measure the number line of 30 past days. you measure it depending where is the close. if i trade qrude and lets say i use the open outcry (9:00 am est time) where is the close? i use IB platform to trade and for the crude oil it says Regular tradinf hours is 9:30 am - 4:00 am . should i use 4:00 am as the close to cound this number line,should i use the open outcry which is 9:00 pm to 2:30 am or the end of the day at 00:00???

    3)the same question i have regarding the pivot range.how do i measure it??taking acount the open outcry (9:00 am to 2:30 pm), the regular trading hours as my platform says is 09:30 am to 4:00 pm or the whole day from 00:00 to 00:00 next day???

    i just mentioned crude cause i see in the forum many people trade it but the same question i also have for currencies where i dont know when is the open and the close as the trade all day....:confused:
     
  41. Yes for the opening range you use the pit open. For the purpose of the number line you use the pit close at the close. That is still used as the settlement price. For pivot ranges I use the 24 hour market cycle. As far as the time used for the opening range, that is entirely up to you. Let me help you out here. If you are a fader and counter trend trader, use a wider opening range. If you are a momentum trader, use a narrower opening range.
     
  42. Maverick first of all i want to thank you for the quick and precise answer you gave me.

    i also have a couple of questions for you. as Mark says to get an A up you ve got to wait half of the opening time. lets say your opening time its 15mins and your Aup for GC is 1358.15. if i have understand it correct he means that gold have to trade 1358.15 and higher for 7&half mins. if it trades for 4 mins there, then drops to 1357.90 and then after 1 min goes over 1358.15 should i have to start counting 7&half mins from the beggining?
    Secondly if it starts trading 1358.15 and at the end of the 7and half mins have reached 1362 should i take the position(of course if all layers of acd method says me so) or its to high from the Aup?

    And last question is about time. Mark says if you take the position and it goes nowhere for time equal to the opening range just leave it. if you go to his book at page 136 at the chart of unleaded gasoline at May 11 it says get short at Adown. if you look the 2 folllowing bars you can see that market didnt go anywhere,why he keeps his position to the next day and he doesn't get out?

    thanks again for your previous answer:)
     
  43. ACD gives you a bias for the remainder of the day, you still need to know how to trade.

    So for your example if it gives you an A up, you wouldn't automatically get long because it could still close below that value or below the A up level but above the opening range, or within the opening range ect.. If you watch the seminar that he did, me mentions that if 30days ago the market put in an A up, closed above the opening range (using the number line), and it opens above the pivot, he might get long a little when it trades above the opening range knowing 30days ago it put an A up and closed above the opening range, you have protection of the pivot ect...thats where the layers of ACD comes in.

    The question about time is Mark likes to trade when he can trap people. So if he gets into a trade and it goes nowhere, he will usually get out of some of the position because he believes the longer it just sits there the more people can take the same trade, and the herd usually gets slattered. He talks about this also in his seminar.

    I'll tell you how 1 trade thats works well for me with the ES. If we have an A up, 30 days ago we had an A up that closed above the opening range (the number line tells you this). Then say coming into the close if we are trading in the opening range, I will look for a reason to get long and set my stop at the bottom of the opening range. Again it just goes back to ACD gives you a bias, but you still have to know how to trade.




     
  44. Like kingdong said (can't believe I'm saying that), you have to be able to trade first and foremost. ACD is not a red light/green light system and that is where people struggle with it. ACD to me works best for price action traders and tape readers because ACD is all about price action.

    So take gold for example, if I'm trading gold, I'm also watching the euro, oil, spoos and silver. I'm also watching the ACD on those products and what they are doing. Are the spoos strong? Are commodities strong, are they confirming A ups? Is silver stronger then gold? If so why? What are the macro signals, is Gold trending up, has it been sluggish? How is it responding to news?

    All these things are very important. As far as the ACD details, ACD is about three things, time, price and volatility. If Gold is making an A up, it doesn't need to stay above the A up for half the OR time, I would like to see it there at the end of the time period. And again, even if it confirms I may not take the long. Because it really depends on how price is acting. This is why you need to be a good trader. You can't just buy it there. You have to look at all the other factors I mentioned above.

    As far as the C down. Mark would do those late day C down trades and hold them overnight expecting a gap the next day. This is usually a good trade because it's usually a market reversal day. When you get a really good strong signal and the market is strong all day then late in the day, rolls over, makes a new low and closes below the C down. There are a lot of longs trapped that were buying the dip late in the day that got stuck and now need to get out. They are hoping the uptrend resumes the next day. If it doesn't, then they need to get out fast. That is usually a good overnight trade. Again, though with everything else, you need to look at all the other factors. ACD is not a magic formula. But if you are a price action trader, there is nothing better out there because it captures the three dimensions of trading perfectly (time, price and volatility).
     
  45. thanks both of you for the help.
    as far for the late C you said, you mean at the end of the pit trading? eg for gold 1:30 pm est time?

    also i would appreciate if you can suggest me some books that i can buy regarding trading.

    thanks again!
     
  46. Yes, the end of pit trading. Most of the stuff I would recommend is the classical old school stuff such as all three Market Wizard books. Also "Reminiscences of a Stock Operator". Other favorites are "Fooled by Randomness", "Against the Gods" and of course "The Logical Trader".
     
  47. i ll check them! thanks again for your help
     
  48. My advice is to skip all these 'story books' Maverick recommended and dig into Market Profile and watch the DOM for a few weeks(around certain times).
     
  49. I would "not" recommend market profile with ACD. One of the problems I think traders have is using too many different methodologies to trade. All market profile will do is confuse the ACD stuff. I have nothing against market profile or any method for that matter. If one wants to use market profile, then use that and not ACD. If one applies ACD correctly, they do not need market profile.

    As for those books I recommended, I intentionally did not want him to read "how to" books as most of them suck. Rather I suggested books that focus on "thinking" and the more abstract ideas of trading.
     
  50. learned quite a bit and modeled my strategy after his. If I could thank mark fisher in person I would. Perhaps I will run into him at the borgata.

    http://theopeningrange.blogspot.com/
     
  51. good post, the last sentence is key. Not too many gurus out there talking about time stops, if you're stop is .20 on one crude contract and you are long expecting a breakout, to me getting out with a .10 cent loss is a win. Hard to teach a new trader that as they can only think about the $$ in front of them. To me most of what is in the Fish's book is about being on the right side of a trend day, and living to tell about it if you are on the other side. Enclosed is a vix chart for edification, just to remind that the market is not constrained by our limited thinking.
     
  52. I more or less discuss the acd method in my blog...I use two of his indicators opening range/pivot and trade off of it.

    I finally was able to grasp markets after reading fisher's logical trader...

    I attempt to solidify the idea in my blog...opening range theory etc...

    http://theopeningrange.blogspot.com/
     
  53. Better odds of running into him, I'm told, at http://tinyurl.com/3ym2cpz -- down the block from MBF in Hewlett, LI.
     
  54. Nice blog and helpful. Thanks.
     
  55. Has anyone noticed and resolved how to deal with this challenge on ACD?

    Has anyone noticed that is trading ACD, the issue of what to do when a significant narrow range day gets taken before the opening range is even set? It makes for a confusing dilemma. Which gets priority? I am finding the one which triggers first, since both are valid in volatility trading. Take the ES for example today. Per Mark's video, you would use the stock market open 9:30-9:50 ET and then 3.5 above that but high of the previous day already triggered a long off the NR7 breakout. I have seen this in other markets as well

    I guess it comes down to which S/R is more relevant at what time?
     
  56. Does anyone clear through fishers firm, MBF? I plan on going to NYC next month to meet with some people at the nymex about leasing a membership and also in search off a clearing firm, I was planning on contacting MBF. I know all you need to open an account with them is 100k plus data/cqg or tt...are all their traders (that don't do marks prop stuff) just remote, or do they have an office/trading room that all their guys trade from? I'll be contacting the firm, but I'm just curious if anyone has done business with them and has some feedback?

    As for ACD, the opening range time value really is irrelevant, in my opinion. If you understand the concept of ACD and volatility, you can really use any opening range or A value. For example, last night, I was bullish on nat gas(I thought we would be getting an upside breakout). So I was watching the mkt around 8pmCT (Asia opening). I just used the high low from 7-8 pm, then used 10 ticks plus or minus to give me some A values...the low from that time period was also the low of the day, and because I was bullish, I just put on the trade with a stop under my low opening range low, also looking to add if we made an Aup...that trade put me in like a 12 tick stop, so I "doubled down"...I'm thinking nat gas was going to make a big move, so if I can get a 15 tick stop, time to "maximize size", so I bought 6, the position kinda started working and just still to the next 6 hours, and over that time I just added 4, with the same stop...I'm risking 10-15 to catch a 100 tick move (you have to take that bet). The market didn't go my way, trading opened NYc trade with an OR above my stop then fell through, I still got out, took a 10 tick stop, but the mkt proceeded to fall 150 points....if I had balls I should have flipped short on mg stop, with a stop over my opening range from that night, but I hit my daily loss limit and I don't want to sell nat gas cause I'm bullish on it long term...but the concept of ACD always gets you into good trades or minimizes your risk if your wrong, if I would have flipped and got short, that's a C down with a 15 tick stop and potential profit of 150 ticks...why I didn't take the trade, that's my disciple problem, not acd not working (or not knowing what the a value should be...)
     
  57. You can really use any time period that has high volatility ( or a big order being filled), then just use that as your "opening range" value, then create some a and c values around that...just think about it, someone is aggressively going to the mkt to fill a large order, if the mkt is going to trend in that direction and he's looking to buy more, the mkt should not trade the other side of that "opening range" without turning bias the other way. It's such a simple concept yet overlooked by 99% of the ppl in the market. I know when I'm trading on cqg and bored, and just need my fix, I'll just take the high low of any given period and create an A C D value around it to trade a breakout...this is a terrible trade cause I'm just trading to trade, but the method of understanding volatility and acd works to get you in and place your stop...

    His page on "good news bad action" is probably one of the best concepts in the book as well...
     
  58. Right and good points. I just figured since I had access to the subscription, and he claims its optimized why not use his settings.
     
  59. I went to NY and met Mark a few years back. Very nice and approachable guy. Just shoot him an e-mail before you go up. I spent some time in his office. I didn't really see any independent guys there although I'm sure for a cost you could share some space. Mark has a small office in Miami in a Condo high rise and another in Long Island. Are you thinking about moving to NY?

    Let me know when you want to grab that beer and talk ACD.
     
  60. Excellent point. So many guys get too stuck on the idea of what the opening range is. It's not really an opening range. You could just just as well call it a volatility range. The reason the "actual" opening was used for many years is because before we had 24 hours markets, the actual open was very very volatile.
     
  61. Mav, yea I'll email you, let's grab a beer in the next week or so, I was in the process of moving last time I emailed you then was without trading and basically Internet for like 2 months, I'll shoot you an email next week we'll have to chat. _

    As for acd...I usually spend a few hours Friday after close to go over all my stock trades for the week, which I'll use acd...the one thing that is probably SO important and highly overlooked is how mark talks about position sizing depending on the commodity or stock - the dollar risk $. _Mav, or anyone else, do you have any formulas that you've come up with to create these $risk values for stocks/commodities? _I'll trade acd with a basket of like 15 stock, and I'll usually just try to find trades that give me a 15-30 cent stop and trade em in 1000 share blocks, then add 1000, 500 if the position works...thing is though, I'll get killed when I trade a stock like GS or AAPL, compared to a ABT, X, BP, CVX...i never know how to position size all the positions.

    Also, if your trading stocks, or SPY (which I'll trade in 1500 share blocks during the day, I'll use the opening range of 730amCT (about 10 mins), with a 25 cent A, and .05 C...I'll use 730 because that is pretty much when all the numbers/news come out, so you see a nice reaction to the news right at 730...I'll more or less just watch the mkt closely when the number comes out and wait till the market settles and cools down to give it a OR high/low to use...so basically my day for SP's will always open at 730. _

    There was a nice setup using that OR today...mkt was week, down 6 PTS all night, then firming up and going into 730 number trading around .15....730 number came out we, which was ok, mkt started trading up around .20-.25...then cooled off around 745...you could easily use that 15-20 high low OR to get you in and mark some A C values.

    Same thing with BP when that stock spiked on the news today...I used that value, was like 4755-4825...first few minutes of that initial buying to give yourself a range to trade, went long at 48.30, with a stop under 4750 and limit _over 49+...I wish BP would have sold off on the news, I would be flipping and going short x3 size if it feel below 4750 (c down on high vol)...

    Position sizing fucked me on that BP trade though, cause I got in small, cause my initial risk was so wide, but in reality, even if I would have got in with bigger size I would have used, more or less, time to get me out if the position never started to work for me right away. _So I cut my size big, and immediately got a move to my initial target of 4950 (just a round #, after we broke through offers at 4900), then just getting out at mkt when we went 4950 offer on big size and no buyers up there, stopped out at 4938 after a failure at 50, then lower high on a test of that around 45bid. _

    Position sizing on that trade cost me a lot of money on that trade.

    Same thing with GS all week...got chopped up Monday to Wednesday playing GS with 500 share lots, then after getting stopped out towards the low on 1000 shares I flipped long but with only 200 at 171.55 (buy stop above yr OR) and now still holding 500 today (kept buying on today's trend day-into earnings next week)...I'm long 500, I should be long, if my discipline was right, I should be long 3000+ looking to sell into Tuesdays gap up and into earnings, holding some through the news with a stop at b/e...
     
  62. Can you elaborate a little further on this for breaking news plays? Do you use a specific time period on breaking news, or do you read the order flow to get the opening range?
     
  63.  
  64. Per Mark's website (trial subscription) the Opening Range for CL is 45 minutes starting at 8:30 am ET (yes, before pit open) and A value is still .08 an C is .13
     
  65. you had a slam dunk short sell stop limit below the day (and month OR) in LVS today at the 4714 level, I was watching it and when it broke below that level it broke so fast I couldn't get it in on my orders. Not sure if LVS had made an "official A up" but it opened up, with nice volume, then volume feel, and then collapsed through that day and year OR. I would consider that a nice C down setup. That's probably the easiest ACD setup to take...get an OR value for a stock, note the yr/mm/wk OR then look for an A up (or down), then place some sell short limit orders below the Or with a time stop also...if u don't see an immediate move, get out.
     
  66. INFJ, where do u ex floor guys go to trade? I worked with a cbot ag floor guy during the commodity boom a few years back, by he left the floor cause of the volatility and risk him and his team was taking on...he tried trading the screen after that and just gave up after a few months and retired. I went to an equity prop, more or less a bucket shop, with all pikers and gamblers...it was pretty much a waste of 8 months...I'm going to lease a seat, and would just goto the floor and sp pits with 100k, but with no volume and everything going electronic, where do all the future prop guys go? I've had an office over the past year, but I hate working by myself, I want to be surrounded by other traders that are serious about market making and trading. If there was any volume left in the big spooz pit i'd just head down there? But I don't want just be the guy that's trading 2 lots and just hitting the BxA all day.

    Where do u ex floor guys go to trade?
     
  67. You might want to check out HTG. A lot of futures guys over there and pretty independent.
     
  68. Too keep this acd discussion going, you may want to look into this setup...the past month, with the markets just inching higher each day (and not really any range expansion). _Breakout strategies, acd- a up type setups - aren't really working. _I've been doing this and it's been quite effective to buying dips and adding to them for a 2-3 day swing trade. _Find a stock...note the opening for the year/month, week, day and fishers pivot point formula. _Find a stock that's sold off and it's trading near/above the year (and month) opening price...the next trading day, this level should serve as a long term support to put this on....let the stock open, note the opening print and the days PP (and pivot high-low). _You want the stock to open down from the OR, but not trade below the year/month opening level (or if it does, trade below and have a failed a down type action. _If that happens note the current days low and place buy limit orders above the mkt right above the days opening range and pivot point (which should be just above the day OR value)...if you get hit place a stop below the days low or a mental stop if it makes an a down. _If it makes an a up, start adding to the long and moving stop below the days opening price. _You would be surprised how effect this trade works in this type of market especially with a stock that has earnings, trades down, but rebounds mid day. _It works even better if you can find a play with a nice tight pivot, cause you can expect increased volatility for the day and it will turn into a trend day cause all the late shorts are getting caught selling short into the low. _

    I played this action in DNDN yesterday, getting long on buy stops at 3513...take a look at the chart and note the values it will give you a good picture of the setup.
     
  69. I noticed the same. I am trying to just focus on NR7/NR4 dailys to increase the effectiveness of ACD, but even some of those in last month, nada. Last couple of days USD/DX, double NR7, and almost zip today.
     
  70. I'm doing something very similar. I use daily, weekly, monthly and quarterly levels and they all interact with each other. Once you understand the dynamics of volatility in different time frames, your mind starts opening up to all the different possibilities.
     
  71. today was a perfect example of opening range breakdown you were either short biased or got your ass stopped out. Not cherry picking but this is the kind of trend you want to ride to make up for the chop.

    spy ten minute
     
  72. Question for ACD folks: Can one use the ACD methodology using strictly end of day data?

    TIA for your input.
     
  73. Great thread by the way, I've read it through numerous times and gotten some great info.

    My question relates to OR, I used it a couple years ago when I traded Naz stocks in University and it was pretty cut and dry with market open/close times to determine a timeframe that works well for you.

    I've been trading Nat-Gas Cash markets now for a couple of years and been pretty successful at optimizing day gas (for an energy marketer). lately I've been branching out into buying/selling ICE basis and using bank swaps to optimize calendar spreads
    as they generally have better spread cash flows.

    I was wondering how hard and set the rules need to be for OR? If I can pick up a directional bias on any given day, I can manage my book more efficiently by buying early or waiting until later in the day if I can anticipate a sell-off. A lot of the time, there is huge volume before before pit open with significant moves but other times nothing before open outcry.

    Is it detrimental to the system to change OR timeframes? I'm sure consistency is important but if I see large action pre-pit, I tend to mold my OR around that action vs using a hard and fast time frame.

    Again, this is subjective and I base it on what I see on T&S and my charts. I've only started experimenting with these variables so if I need to make a correction, or all those out there who are very knowledgeable with the system see a flaw I would appreciate any feedback.

    Thx!
     
  74. Yes. Most of the ACD stuff I use is based on end of day data.
     
  75. The idea for the OR is to pick a time period that has some significance to it. You also want to be consistent. A lot of the price action that you see from the ACD levels comes from understanding how any given market "should" be behaving under normal circumstances. So if you keep changing the OR time period around it may affect the way you interpret that price action. BTW, there is nothing stopping you from using multiple OR's throughout the day or week.
     
  76. Thanks Mav,

    I always use a consistent length of time just at different periods if the action is there. When I used the pit open exclusively as the start of my OR, my results were not as good as when I began incorporating big pre-open movements.

    I really like the idea of using multiple OR's during the day and will start working this into my system.

    Cheers

    JO
     
  77. I'm trying to understand how to use this concept on breaking news plays and would really appreciate any feedback. I'm using UNH today as there was news
    midday that caused great volatility in the stock.I understand that ACD works
    really well with understanding the volatility plays to set the opening
    range.



    So my first question is with this, when do you actually set the range? When
    it was trading 42.50 took size on the offer quickly showing its strength,
    and 45 rejected it cleanly. Would you use these levels as an opening range
    for this type of play? Or use that swing low below 42.50 as the opening
    range bottom (I know it probably doesn't matter) I'm just trying to
    understand on breaking news plays, how you actually get the range.



    Secondly, is the A value the same as it would be for a normal open? Or is it
    different since its breaking news? I currently use about 20% of the average
    daily range.



    Thirdly, once it holds about the A value (if I'm using the correct number),
    how long on breaking news plays? I was using about 2.5mins but also saw that
    once it was above 43.16 it held for volume so I figured time wasn't as
    important as it was strong above that level.



    Finally, if we would have dropped to the C down, what would your play have
    been besides thinking short? Would you carry it overnight as its a late day
    C down?



    Thanks again for helping me with this. I am a firm believe in using ACD to
    get a bias, just need some clarification from someone more experienced in
    using it.



    Side note: Would today 02/03/2011 be considered a late day C up in the ES?



    KD
     
  78. Again, my answer is going to seem vague but I can't stress enough how one has to make ACD their own by making it compatible with trades you feel comfortable making. Are you a momentum trader or a fader? Are you only an intra-day trader or do you hold overnight? Do you like to scalp or hold on for the bigger moves? See all this will depend on how you set your ACD parameters.

    On my intra-day ACD that day, the stock first made an A down and then on the news confirmed a C up. It made a weekly A up even before the daily C up which is a great long setup. Now another thing you could do is use your normal intra-day settings then when news comes out slap on another OR around the news event and see if the ACD news levels coordinate well with the normal intra-day setup.

    In other words, maybe the news A up is the same area as the intra-day A up. Or, maybe you get an A up on the normal ACD levels and you are able to buy that wick on the failed A down on the news ACD level.

    Use your creativity here! There are a million ways to use this but it will be for naught if you it's not compatible with how you like to trade. At the end of the day, all technical systems are about two things and two things only. Getting you to pull the trigger to get in a trade and getting you to get out when you are wrong. If your levels and parameters serve that function, then you my friend are shooting well over par.
     
  79. Thank you Mav great insight and advice I really appreciate it.
     
  80. Perhaps you can clear something up for me before I decide to spend a great deal of time studying the ACD methodology. Namely: What is the opening range when using end of day data?

    I currently swing trade using end of day data with a breakout here or a pullback there. My work is in the evenings and weekends. I have read and enjoyed the first chapter of the Logical Trader (a few times) and even though the charts are not present I have no problem visualizing what is being described.

    All the examples in chapter 1 deal with intraday trades and the OR is in minutes. How does one establish the OR with EOD data? A 2 or 3 day high and low? Weekly high and low?

    Thank you.
     
  81. I don't want to go into the particulars as I've spent the last 4 years of my life perfecting this and I don't just want to throw out there all the various combination's of levels that work really well. If you read the book and have a solid understanding of what exactly the essence of ACD is, you will figure it out pretty easily.

    Having said that, I'm not trying to imply there is a magical set of numbers that work. As I've said before, you need to have a very thorough understanding of volatility and price action to comprehend this. Me giving you opening range parameters or levels won't help you much.

    Please understand that ACD is not a technical indicator in that it produces absolute price levels like a moving average or a support or resistance level. If you are not a good price action trader, it will be difficult to grasp what ACD is telling you. But everything you need to know about ACD is in Fisher's book.
     
  82. I thought that this post along with Mav's advice on using multiple OR's and thinking more in terms of "how" the instrument ought to behave have been invaluable. I got a little stuck at first on using the system as an indicator with stringent rules (like a MACD or RSI etc..) but once I started experimenting and using it in the reference of price action, it started coming together.

    For what its worth (and believe me I don't claim to be any sort of expert) just play around and see what works. I don't know if everyone will agree but once I switched focus, I've had far better results.

    Thanks guys, your advice is helping :D
     
  83. Didn’t realize the EOD OR info is of a proprietary nature. I wrongly assumed some general EOD OR parameters would be covered in a later chapter or in the appendix. That’s apparently not the case.

    Thanks for your input. I appreciate it.
     
  84. Maverick do you use ACD to daytrade commodities?
     
  85. I don't. What I do though is use intra-day signals for entering into weekly trades. Jsmooth went over similar type of trades. Such as using a failed A down on an intra-day to enter a weekly or monthly signal.
     
  86. Let me explain so my response doesn't come off as rude. Here is the thing about trading. When you use standard stuff that everyone is using or watching, it creates traffic. It means obvious entries in the market are going to generate lots of stops in that area which means the market is likely to test that area and stop you out. This is the problem of making obvious trades. The idea is to find a part of the highway where there is little to no traffic. This means there will be a minimal amount of stops there and more likely you will be able to stay in the position. Telling everyone where my OR's are is like putting a sign out on where I'm entering the highway thereby creating more traffic or noise. So it would be better if you found your own quiet spot to enter trades. Hope that explains it better.
     
  87. Thanks Maverick, I just started the book and that was what I was looking at it for.
     
  88. Just wanted to say thanks for mentioning this method Mav. I hadn't heard of Mark and wouldn't have paid attention if someone of your credibility hadn't stood behind it.

    After spending some time studying it, his method and just his general way of thinking makes a lot of solid sense. It blends well with my own approach and I'm considering investing serious time incorporating aspects of it. Seems like a stand up guy too. Thanks again, seriously.

    Also nice article, surf.
     
  89. What is the name of mark's CTA?
     
  90. His management company is called MBF Asset Management. It looks like they are re-building the site as we speak. Not sure specifically what the name of the CTA is.
     
  91. Your post came off as someone I listen to.

    That’s a damn fine nugget of information and I’m surprised more people haven’t mentioned that. What you say makes perfect sense as I’ve been spending far too much time in the obvious area.

    I’m hopeful that I’ll see the tie in and a way to use EOD data with the ACD methodology. Currently I swing trade breakouts. Scan at night, look for best PA and take my best guess.

    If anyone is interested I picked up the book yesterday and my method of learning is to scan, then quick read and finally to slow read and type key points, observations and questions (I type very fast thanks to the Army).

    Here’s my first chapter notes.
     
  92.  
  93. Thanks for your notes man, seriously.

    Down the road, if you keep this alias, I'd consider helping you out likewise if I can put together some tools related to this method.
     
  94. FM: There has been a strong belief in many corners that speculators in general and long-only commodity funds specifically are distorting the price of oil. Where do you stand on this?

    MF: That is rubbish. Basically if you look at the [commodities] that don’t trade on futures markets – coal, iron ore, uranium and those with a limited market like rubber, LNG (liquefied natural gas) or rice – they went up just as much as those [commodities] that trade on active futures markets. People who believe that will believe anything. You can blame the governments themselves because of all this quantitative easing and printing money will end up someplace. So the money went into commodities. Because commodity markets are so much smaller than the equity and debt markets, it is a huge tidal wave that gets reflected in price. So I don’t think you can blame speculators. You should blame the printing presses, not the speculators.

    word.
     
  95. As with anyone in the futures business, you can search NFA for his activites -- http://www.nfa.futures.org/basicnet/ -- in this case, using NFA ID number 0065924.
     
  96. I'd bet my prized photograph of Don Bright punching Miley Cyrus in the face that tonyalva is surf. I've had a gut feeling you were too, but not solid. Not like it matters.
     
  97. Let me know when you have a "gut feeling" about the <i>markets</i> -- so I can take the other side of your trade. Thanks.
     
  98. Mr. King has too much technical knowledge to be Surf.
     
  99. And Mr Prometheus passes the IQ test... 2d person so far on Etrader, I believe.
     
  100. I'm not pot committed to my hunch, though I'm betting at the very least a personal connection.
    Anyway I don't want to contribute any further to derailing a legitimate discussion of this method so that's all from me.
     
  101. LOL. What a weasel... Almost everyone on ET has a "personal connection" with Surf -- he used to throw parties for the ET crowd.
     
  102. Isn't there usually a big annual Surf fest in NY every year around February? I heard those were legendary. :)
     
  103. Thank you sir! That would be great. I'll send you my other chapter notes.
     
  104. Today I did an ET search using “ACD” and discovered an extremely useful Supplement Workbook to The Logical Trader.

    Everyone who reads and benefits please send Maverick74 a thank you note as he sure as hell deserves it.
     
  105. Really appreciate for you guys contribution about the ACD method, learned a lot from here, thank you Mr. Maverick74 and Mr. Robert Yanks for your kindness. :p
     
  106. I learned allot from Mark's books. I even went to a seminar he did shortly after his book came out and watched the video at least 5 times (which is quite a few hours) and took notes.

    The big thing I learned from the book and mark's lectures was not the ACD method itself.

    It was the notion that liquidity sqeezes are what drive short term profits.

    this is true for both momentum trades and fade trades. Short term trading is not really about static chart patterns. It is about understanding the logic of how:

    1.) The longer term, less price sensitive traders enter the market (relative to your own time frame)
    2. How weak handed traders, on your time frame or above, tend to position themselves and manage positions.

    The sophisticated traders on the time frame below you might on net be taking from you, which is why you in turn must Focus on the time frame above yourself.

    If you understand the logic of these few things and really explore this concept, you start learning how to set up good trades that have very little intended risk. (I say intended because, of course you never really know till the trade is closed.)

    When I look for trades or ideas to backtest these concepts are what are on the forefront of my mind. It is not about my personal opinion it is about how other traders are positioning themselves. Go for a quick ride or catch them when they are overextended. That is what I want to focus on and to me that is all short term trading is.
     
  107. Hi Maverik,

    Are you planning to attend this year's expo in NY in a week?
     
  108. I wasn't planning on it. I would have come up for Surf Fest, but I hear that event wasn't taking place anymore. :(
     
  109. This is well put.

    I used to trade prop years ago, and my entire focus was to identify when longer term, price sensitive traders entered the market. A big component of the routine was measuring the range (at that time the first 30 min) and responding to evidence of order handling on the tape as price approached boundaries and extensions of that range. Aside from the tape reading, that was mostly self-taught.
    I since threw out any opening range analysis with the bathwater, when specialists started to become useless and tape reading, in that form, became pointless.

    I only now use it as a small piece of my main method to identify the general chop of the day. Still can't do it systematically though -- it has to be discretionary, which I'm trying to get away from. What Fisher describes reminds me a little of what used to work for me years ago, and has inspired me to revisit that framework alongside what I'm currently doing.

    Robert, do you use eSignal? (Or NinjaTrader, eventually trying to ditch eSignal, but that's way down the road)
     
  110. Hey jsmooth, did you ever end up going up to NY to talk to Mark?
     
  111. Mark Fisher will be on CNBC today between 11:00 and 11:30 central time. Check it out.
     
  112. Here is the Mark Fisher video. Am I the only one that watched it? LOL.

    <object id="cnbcplayer" height="380" width="400" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=9,0,0,0" >
    <param name="type" value="application/x-shockwave-flash"/>
    <param name="allowfullscreen" value="true"/>
    <param name="allowscriptaccess" value="always"/>
    <param name="quality" value="best"/>
    <param name="scale" value="noscale" />
    <param name="wmode" value="transparent"/>
    <param name="bgcolor" value="#000000"/>
    <param name="salign" value="lt"/>
    <param name="movie" value="http://plus.cnbc.com/rssvideosearch/action/player/id/3000009960/code/cnbcplayershare"/>
    <embed name="cnbcplayer" PLUGINSPAGE="http://www.macromedia.com/go/getflashplayer" allowfullscreen="true" allowscriptaccess="always" bgcolor="#000000" height="380" width="400" quality="best" wmode="transparent" scale="noscale" salign="lt" src="http://plus.cnbc.com/rssvideosearch/action/player/id/3000009960/code/cnbcplayershare" type="application/x-shockwave-flash" />
    </object>
     
  113. I’m flipping thru EOD charts looking at the Sushi Roll and doing a little backtesting and I’d like your opinions on something.

    I set up my scan and here’s what I noticed. In all cases today’s close is higher than the high of the previous 5 day rolling trading days, and in most cases today’s close is also higher than the current 5 day rolling trading days. But, sometimes today’s close is not the highest close of the current 5 day rolling trading days.

    As an example, if you look at GE on 1/10/11 you can see that the close of 18.51 is higher than the 5 day rolling high from 12/28/10 to 1/3/11 (18.50) but in fact it’s not the highest close of the current 5 day rolling trading days from 1/4/11 to 1/10/11. Do you consider this a successful Sushi Roll? Or, do you want today’s close to also be the highest close of the current 5 day rolling trading days too?
     
  114. Here are my notes from the 3rd tape of the NYMEX Symposium :
    Trading is the hardest business in the world.

    Not for the meek.

    Tap into people’s emotions, people’s perceptions.

    Get people caught so they want to run for the door.

    The more the indicators line up, the more you want to step on the gas.

    Jake Bernstein Sentiment indicator is what he uses.

    Identify when people are caught, and beat them to the door.

    The harder the trade is, the better the trade is.

    How high is high-who the Hell knows?

    How low is low-who the Hell knows?

    The market Murphy’s Law: The market is there to screw the most amounts of people, to inflict the most amount of pain, to torture the most amounts of people, in the least amount of time. And it does exactly that.

    Reversal pattern-He shows two down days in a row, lower highs and lows and closes and third days is a gap with the open higher than previous two closes: No one likes to buy gaps; If there is a gap, he wants to trade the higher gap because more people are hung or trapped.

    The only thing he cares about is movement.

    Outside reversals: H>H1 and L<L1 and closes below the previous day H or L.

    Do you think that works (is there an edge here)? If everyone can see a chart pattern like an outside reversal day can it work? The answer is no.

    What does work is outside 5 rolling days: Have 5 bars that are engulfed by the next 5 bars; He shows that last bar making an outside reversal up-that works. (38:25)

    It works because people are hung and it’s not as easy to see as a one day outside day.

    People make the same mistakes over and over-they don’t change.

    What is slope? – Rate of change.

    He thinks the slope of the moving averages measures the rate of change of the market’s perception of the market.
    For moving averages he likes 14, 30 and 50. It’s his favorite in all time frames.

    MAD move is a moving average divergence move. Moving averages are diverging. You get an extreme move and fade it.

    First he looked to see if chart is going from neutral to all three ma’s rising together (market perceives a bullish attitude) then he will look at the number line to see if it’s up at +9 – buy it. If the number line goes back to zero they get out. Or, when the lines start to turn down get out.

    Kindergarten trading: Watch the ma’s: If they are rising bullish; turning down then goes to neutral, then they can turn back up for bullish or turn completely down for bearish. It’s the perception of the market place.

    Moving average fake out: Ma’s are rising and price drops below the 14 and reverses back up off the 30 and goes above the 14 look to buy at an A Up.

    Regarding volume: He doesn’t follow it because volume is always hidden. Volume is not a good enough indicator to make a difference.

    Trading is about finding people Achilles heel and knowing when they are weak and capitalizing on it.

    Everybody has a weakness-marginalize your weakness-that’s the best you can do.

    Minimize your risk by time, not by price. Time is a much more important stop.

    Next he discussed rolling pivots: 3 day rolling pivots work better than a 2 or 4 day rolling pivot.

    Everybody wants to predict when the market will be busy or slow (volatile or not).

    They found “With the meat of the market concept” that when you have very narrow pivot ranges, the next day will often be volatile (have juice). That’s what you want if you’re a breakout or momentum trader.

    Narrow pivots tend to predict volatile sessions.

    In the markets they track, they look at the last nine trading days and ask “Is this the narrowest pivot of the last nine days?” If so, they want to trade it.

    Also, if you have three consecutive smaller pivots, they like to trade it.

    A trader’s best friend is volatility.

    They go back and backtest like everyone else should be doing. After they know what works they backtest and look for optimal things.

    He wants small opening ranges and small pivots with setups that make sense to create optimal risk to reward trades. If the trade isn’t there, don’t trade.

    The best traders sit on their hands 80% of the time.
     
  115. thanks I missed that, interesting how he keeps bringing up the idea of an "energy currency", any chance his group is positioned to take advantage of that, yep. Trying to understand how that would work, I think the idea would be to have a global oil price that doesn't have the volatility swings of domestic currencies which is a major headache for large oil companies, thoughts?


    http://seekingalpha.com/article/129500-banking-on-energy-rather-than-currency-or-gold
     
  116. Honestly I never traded the sushi roll. It's very similar to an outside reversal day or week except you can use it on any time frame. The problem I have with outside reversal type patters is they are way too visible. Everybody seems them and they don't really work anymore. Is it something I would pay attention to if I saw one? Sure. But I'm not actually going to make a trade on that.

    The one caveat I'll throw in there is the idea of rarity. Like Fisher says, the less frequent something happens, the better the signal. I see outside reversals all the time. They are not rare at all. But if you see a stock that has been smooth and trending for months or quarters and then you spot a sushi roll for the first time in perhaps 2 or 3 years, then I would certainly watch that like a hawk.

    But in the broad based indices I see reversal patterns everywhere and they don't work. Why? Because the indices are analyzed 7 ways from Sunday.
     
  117. Thanks for posting. I was away otherwise I always want to hear what Mark has to say. If for nothing more than mere reflection.
     
  118. Thank you Mav (if I may call you that). As always, excellent insight. I’m just looking at all the material and methods he brought forward in the book and videos so I can see it and test it and then hopefully come up with something that everyone else doesn’t see. As you pointed out, even at 5 days this pattern stands right out. Now I can scratch off the outside 5 day rolling trade.

    If anyone is interested, I ran a simple backtest that found every 5 day rolling outside day and then bought the next day with various entries and one of the better ones was if today’s high is greater than the high of the previous 5 days plus .25 of the 10 day ATR. I’m using a group of 1500 stocks that consists of the sp500, mid cap 400 and small cap 600. Close after 3 days before getting fancy with exits to see if there is any edge. Bottom line as Mav pointed out is no edge there. I also ran a backtest so today’s close is higher than the previous 5 day rolling high but not the highest close of the current 5 days (looking to see if it’s hidden will it work better). Same basic results. I attached the 2010 ss for anyone that wants a peek. The first run was 3,614 setups and the second run (attached) was only 438 setups. About a 53% win rate taking every setup. For the years 09 08 07 it does worse, or worster.
     
  119. Robert, I would really prefer if you call me by birth name, Maverick74. Kidding.

    I never did the back test so it was interesting to see your results. I pretty much expected that to be the case. Here is what I like about ACD. The idea in trading, like anything in life, is to look for the opportunity that others are not seeing. Head and shoulders, reversals, doji's, 200 day moving averages, moving average crosses, support and resistance, etc, everybody sees that shit. It's plain as day. Hell if you miss any of that stuff, CNBC will point it out to you to remind you. There is no edge in anything that everybody can see right in front of them.

    So the idea is to become a good price action trader and ACD allows you to see price action better then any other method I have seen. This is why it's hard to back test ACD as many have tried because they are back testing simple binary action. The idea is to identify price action that is NOT obvious to everyone else. ACD is one of those things you just have to practice like tennis. The more products you watch, the better your feel will become.

    Because ACD is a price action based methodology, others can't take your edge away from you. You know the old saying, if everyone does it, then it won't work anymore. That doesn't apply here. If you can learn to master ACD, you can keep your edge into perpetuity.
     
  120. That is some fantastic input Mav. Oops, I mean Maverick74!

    I have spent the last six months trading B/O’s that everyone in the world can clearly code up and see. No edge there as I’ve barely broke even with that method.

    I've moved on to the 1 day pivot ranges and 3 day rolling pivot ranges on my charts and I’m flipping thru lots of them looking at the price action, and attempting to see the not so obvious. For now I’m just using the pivot ranges as my de-facto OR.

    Thanks again for your input.
     
  121. Hey everyone,

    I'm new to this thread, but have read over it and am very happy to find a place where other traders are discussing ACD. I personally trade ACD, and have had a good deal of success with it so far.

    Like Maverick, and other posters have pointed out, ACD is not the Holy Grail of trading, it is however a structural framework that allows a trader to see the big picture and remove much of the guesswork from their trading.

    I'd like to throw out some questions, and also throw out some tidbits as to how I have developed a framework to trade using ACD.

    Random thoughts observations with ACD trading futures only (this is solely my opinion and should not be taken as advice, just thoughts for you to work with):


    1) If trading crude oil, one should not use ACD on the open before the major EIA supply report gets released at 10:30am. Doing so would be gambling, not trading. Yes, on certain days using ACD on these days would lead to catching major trends, but in general you will find yourself getting stopped more often than not.

    2) In the sugar market, instead of using the other side of the opening range as a stop loss, use 40% of the range as your stop loss. In 90%+ of cases, it seems if price retraces back in to the opening range this much, they will tend to keep retracing.

    3) When taking the opening range, pay attention to previous day high/lows, weekly high lows etc. These can serve as good take profit targets or signals of continuation should price break through these levels.

    4) While Mr. Fisher may disagree with this a little bit, it does pay to use common sense and not just take a trade solely because an A up or A down was made. For example, in oil fell $4 overnight, but the general market sentiment is bullish, there is a chance that taking an A down right away may not be advantageous, as the market might be a little extended already.

    On a similar note, lets say on any market, the first 15 min bar after a breakout shoots extremely far out of the opening range; if you are a "hold to close" type of trader, you may want to instead take profits at that moment knowing that such a move beyond this level is less likely. How to know this? Familiarity with the market you are trading/tape reading, knowledge of probabilities relative to standard deviations etc; the type skills as pointed out by maverick.

    5) I have found that early day C downs/up are more powerful than even late day C downs/ups.

    6) after a major A up/down parabolic trend day, the following day is less likely to have another trend day.

    7) Some markets really do work better than others, know which ones to avoid. Also, find out what information actually moves the particular market you are trading.

    8) I have found that the time factor regarding entering ACD trades is not as significant as previously proposed.

    9) Excellent a up/down trend days rarely have price hanging inside the opening range for very long after the opening range is established.

    10) The key to profitably trading ACD is to play great defense on most days, and to be on the right side of major rally/selloff trades (and they will come).

    Now some questions if I may:

    1) what markets do you successfully use ACD on? Do you have any personal filters you use? How do you exit your trades?

    2) When calculating the pivot range, for the H+L+C/3, what time frames do you use?

    For crude, would it be best to use 9:30am bar for the open and 9:15am bar following day for the close for the one day range calculations?

    I ask because my platform uses 12:00am bar for the open and 11:59pm for the close, and I don't know if this time frame properly reflects when the most important trading of the prior day too place.

    Would love to hear your opinions on this stuff. Thanks.
     
  122. I have found when using it, use it in conjunction with Crabel NR7 and such. So if today following an NR7 daily, watch the PDH and PDL as well as the opening range.

    Don't trade ACD after a wide range day. Because normally there is consolidation and this is bad for ACD.

    As some have mentioned, you can use ACD to basically bracket and relevant action. That includes price action around the major reports or events. Unemployment, housing, oil reports, you get the point. I would not use it around less relevant reports. Right now evening open with the Yen would be relevant IMO as everyone is hanging on edge for Japanese news.

    I have only used the pivot range off the previous day's range as Mark suggested.

    Thanks for your tips.
     
  123. Is that the book that has the excerpt about NYMEX management's trip to Dubai? If so, totally ridiculous, and I'd imagine there's probably some great stories in there.
     
  124. Yeah. LOL.
     
  125. Funny, a week or two ago I read an interesting story how the crude oil was heavily manipulated by the traders. At the times referenced Mark and his firm would have been a part of that. It was a fairly good referenced story, but that doesn't mean it was completely accurate, but was easily believeable at the very least in part. It is a lot easier to be a genius in a market if you are part of a group manipulating. It makes your methods a lot better if you have control of a market.\ That being said I use my variation of his methods in the 6E and ES and I have been adding value to bottom line, so I guess there is some validity to his work.
     


  126. The idea of the energy market being manipulated seems like a bit of a stretch to me.

    since the 90's, trillions of dollars have been injected into the US economy. There was once a time in this country where these dollars went into things company sponsored pension plans, infrastructure investments, business startups, employee wage increases and the like.

    Gradually, these dollars flowed into various paper pushing activities and leveraged finance on all levels. The massive bubble that popped when tech stocks went down sent trillions in capital out of the market with no place to go. Add to that the constant printing press under Bernanke, and it makes perfect sense why physical asset prices have skyrocketed.
     
  127. Can anyone who trades CL using this method share some charts of recent trades they took and explain them?
     
  128. I realize this is a stretch, but why don't you do the work yourself?

     
  129. Excerpt from the book "The Asylum":

    "You know how I know when someone's cut out to be a trader?" Mark Fisher remarked, hard at work at the time on an untitled screenplay about his concept of a dream trader. "If he can tell me, without looking, the exact time, what the temperature is outside, what I ate an hour ago, what I wore to work yesterday, and what the score to the ball game is on TV."

    Fisher loved whiz kids, which was why he once poached a young man driving an ice cream truck in his hometown of Woodmere, New York. "True story," a former associate says. "Fish is hosting his son's birthday party on Long Island and orders a bunch of ice cream for it. The ice cream guy comes and Fish watches him do all the math in his head for, like, $500 worth of orders. Right there, he pulls him out of the truck, teaches him how to trade, and puts him on the trading floor. And I understand that guy did very well."
     
  130. Awesome I'm ordering this book now! I've heard that story a few times, but still a great story.

     
  131. If you have looked thru the thread you will see that there is no holy grail (although for me a trending market is THE HOLY GRAIL). Most of the stuff covered in ACD is along the lines of system trading 101. I am sure "the Fish" would tell you the same. Alot of the indicators etc are really giving you the same information. New traders are always looking for the perfect moving average, the 20 vs 50 is going to work better or worse depending on timeframe. Look at the markets this way, if you were forced to make a trade right now what would it be?what is a good entry, R/R, should you go for a scalp, a swing, how does the volatility effect the position, etc. Using a case study mentality on a given mkt will help keep your losses small. Not sure why you would want to trade crude for example, I think it is a tough market to trade, don't believe me check out some of the price spikes on qm, How do you quantify the trendiness of a mkt, what should your position size be. I could go on and on. I would tell you to pick one or two mkts/contracts/stocks and focus on them. Can you tell the difference between the price action on AAPL vs GOOG, C vs AIG, a good trader will see the difference in the tape movement etc. Anyway just some thoughts, one thing I noticed about Mark Fisher from watching him trade for charity was that he always hedged himself. ie he would buy oil and sell gas, why would he do that? If you can't answer that question you need to keep trading small and study, good luck with your trading either way. :)
     
  132. You attended his seminar in NY?
     
  133. no I am referring to his trade for charity, I think Dr J from the CBOE put it on and had Mr Fisher as a guest over the past couple years, I will look for a link when I get a minute. My point was he always appears to be hedged, ie he is long spuz, short bonds, etc. I remember him doing the same with corn/wheat.

    here is the link to Dr J's site re MF. Too bad he can't put up a video of this, if he charged like $50 per use he could make some $$ for the kids, well worth it for a new/old trader.

    http://www.traders4kids.org/
     
  134. Did you attend that or watch it live on the net?
     
  135. on the net
     
  136. OK, I think I saw that as well. Although he did more talking then trading. LOL.
     
  137. 1) I trade stock and index options on a swing basis and futures intra-day.

    2) I use the 24 hour session for some, RTH for others.

    Don't sweat the details. In terms of when the session starts or stops.

    I use ACD for everything. I watch commodities, currencies, energy, stocks, all the risk assets.
     
  138. Did you guys catch Mark Fisher's son on Fast Money? He was doing a report on the nat gas market. He looks like he was 15 years old. He trades at MBF of course.
     
  139. missed it, I bet he is sharp though, who is pops gonna give the family business to? Mav here is something you may find interesting
    regarding QE2, there are some wackos on this site but this interview of Jim Rickards I found pretty compelling.

    http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/3/27_Jim_Rickards.html
     
  140. Here is the video.

    <object id="cnbcplayer" height="380" width="400" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=9,0,0,0" >
    <param name="type" value="application/x-shockwave-flash"/>
    <param name="allowfullscreen" value="true"/>
    <param name="allowscriptaccess" value="always"/>
    <param name="quality" value="best"/>
    <param name="scale" value="noscale" />
    <param name="wmode" value="transparent"/>
    <param name="bgcolor" value="#000000"/>
    <param name="salign" value="lt"/>
    <param name="movie" value="http://plus.cnbc.com/rssvideosearch/action/player/id/3000016714/code/cnbcplayershare"/>
    <embed name="cnbcplayer" PLUGINSPAGE="http://www.macromedia.com/go/getflashplayer" allowfullscreen="true" allowscriptaccess="always" bgcolor="#000000" height="380" width="400" quality="best" wmode="transparent" scale="noscale" salign="lt" src="http://plus.cnbc.com/rssvideosearch/action/player/id/3000016714/code/cnbcplayershare" type="application/x-shockwave-flash" />
    </object>
     
  141. What video?
     
  142. I saw it ... he did well, did not appear nervous at all. Dad should be proud.

    I wonder if he trades speculatively (perhaps using ACD), or if he really is trading order flow (market making). Also wonder if Fisher's MBF firm is profitable from their speculative trading, or if their clearing business (really a no-risk transactional business) subsidizes all their speculative trading.
     
  143. Yeah they are profitable. Fisher started MBF Asset Management using his strategies. I doubt he would want the embarrassment of having a failed fund if their prop group was not even profitable.
     
  144. http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/3/12_Jim_Rickards.html

    this interview has a better discussion of QE, this is important to understand if you are a commodities bull. :)
     
  145. Maverick,

    I know you don't want to release your proprietary research about ACD, and understand completely, but I was wondering if I could just ask you a few questions and you can answer whatever you feel comfortable with:

    Do you use the number line scoring method for the commodities you trade? Do you think trading the markets with the highest scores actually does improve results? Do you think using a filter such as a 14 day MA and only taking A or C's on the same side of the moving average direction would improve results?

    Do you use your own custom opening range times? Do you use your own A and C values? Do you use the pivot range as described by fisher to filter trades? Has it improved your results?

    I've had a good deal of success with ACD, and am just looking to continually improve my approach. I can also share some of my own additional research as well.
     
  146. I use to use the number line on the index futures and I believed they worked very well. I love the concept of the number line and when I get some time I'll probably create my own version of it. But I absolutely found it effective.

    BTW, at the current time I'm only trading options on stocks and indices except for a handful of intra-day trades with futures on oil, FX, or indices.

    Back to the number line, I noticed that once a number line got near that 9 to 11 level plus or minus that was the outer band if you will. The market would tend to snap back. So I was always really careful around that area. But if we broke through and held and went higher on the number line, then a big move was coming.

    Like I said, I have some ideas I want to play with and I'll update that later when I have some data.

    Do NOT using moving averages with this system. One of the biggest benefits of using ACD is you are getting unique price levels that NOBODY else is looking at. Once you bring in all the other garbage that people are trading off of then you are going to notice that you are entering and exiting the market when they are. The idea is to have the market all to yourself, not to be in a crowded room with a million other orders around you with stops.

    Having said that, yes, you will improve your results by taking A ups and A downs and failed A ups and A downs with the trend. I just don't use moving averages to define trend, I use ACD levels for that.

    Yes, I use my own opening range times. But to be honest I don't think that is a major part of the recipe. I think what is important is the symmetry you use. In other words, whatever OR you use for whatever time frame, make sure it represents the same percent of the time period you are using. This is important as a price action trader to have the same consistency.

    As far as pivot ranges go, I found the best value they have is for intra-day trading of index futures. Using the pivots to determine relative strength of which index is weaker or stronger works well. Also when the pivots are at the same levels of the A levels I find they work phenomenally well on fades. Important note though, always fade in the direction of STRENGTH. I'll thrown another bone out there. When pivots are located in the middle of the opening range, they work as great entry levels once you get a confirmed A up or A down to enter. You want to see price bounce off the pivot first before entering.

    One more thing, the width of the pivots is helpful as well. Tight pivot ranges usually indicate a volatility increase and very wide pivot ranges usually signal a range bound day. In other words, be careful about taking A ups or A down on wide pivot range days unless the pivot range is located above or below the entire days range, i.e we opened above it and never traded into it and vice versa.

    I posted a lot of stuff here because I want to keep the thread active and it seems we get a lot of guys that stop by and don't come back. LOL. So I will make an effort here to keep this thread alive.
     
  147. Great post Mav, thanks for sharing.

    I agree about the Pivot Ranges, its one of my favorite setups and seems to work the best intraday.
     
  148. Mav,

    The interesting thing is that decent number of my entries and exits correspond with Acd, plus few other systems.

    Are we all doing the same thing with different flavors, I wonder? :)

    Regards,
    Red duke

    P.S. I guess you are not going to expos these days. Was hoping to see you there this year in NYC.
     
  149. Mav,

    Thanks a bunch for releasing some of your tweaks to the ACD system. After calculating the prior days pivot, you don't worry about the overnight session in regards to the next mornings opening when using the pivot range? (you don't worry about the pivot becoming invalidated based on the overseas trading action is what I'm trying to say).

    Something I can share that I noticed is the following:

    If you're trading grains and you take an A-down or A-up, on a very good rally/selloff day you should be able to put your stop right about the low of your A-up confirmation bar for longs and vice versa.

    You will get stopped out much more frequently on non-rally days, but if you are the type of person who prefers to take 8 losses of $200 each and have 2 winners of $1400 each this might be a better strategy as opposed to using the other side of the range for stop loss.

    Also on grains, round numbers do well for exit points, and they should also be paid attention to for entries. For example, if I have a 10 cent opening range on beans, and my A up is at 1358, despite the A up being hit, I will put my entry above 1360 knowing that their could be resistance at 1360.

    For profit targets the same idea can be used. If I take an A up at say 1335, and then price breaks clean through 1340 I will stay long. Lets say there is only an hour left in trading and price is up to 1347, unless the market is showing tremendous strength I will look to take profits at 1349.75. However, if I am comfortable that the market will continue higher, I may just put my stop loss right at 1340 so I will lock in profit and have a free trade for the rest of the day.

    I'll share more stuff if others besides Mav also make worthwhile contributions.
     
  150. Well, everyone has different variables for ACD so you must be using some generic numbers. LOL. Just kidding.

    I haven't been to an expo in ages. I'll probably come up to NY this summer. Should I organize an ET get together? I was going to come up for Surf fest but the event has been discontinued. :(
     
  151. That would be great. Let's try to have a gathering this summer.
     
  152. Hello, may I ask what do you think is the best software to go with this system ? I have an old metastock that I have to change ...

    thank you !
     
  153. His main point is that the fed's balance sheet is so large that they will be able to monetize the debt easily; that is that there is so much paper/yield being rolled over it creates a permanent QE so to speak, which is inflationary, also I think its important to understand the underlying mechanism of how the fed actually increases money supply etc., this takes some study but will give you a better understanding of what's really going on. I don't like the Oliver Stone approach to the markets, basically most of what the fed is doing is right out in the open, the price of gold says alot about where we are with inflation. I have been thinking alot about this and my guess is that long bonds (price not the rate/yield) is a smart move, I would not be surprised to see some negative macro event take attention away from qe ending, the result of this being a flight to safety, that will put a bid to treasuries in short order. Good trading. :)
     
  154. I currently use it with Thinkscript but also had it coded up on Trade Station and E-Signal. As long as you have access to historical data, it doesn't really matter.
     
  155. Thank for your reply Maverik, any reason why you use Thinkscript rather than Tradestation or E-signal ? did you code yourself or is it possible to buy it ?
     
  156. I like the versatility of Thinkscript better and the scripts are stored on their servers. E-signal is a resource hog and I never really liked using it. Trade Station was fine but overly complicated. I do not code myself. A friend wrote the code for me on all three.
     
  157. Hey, screw New York, how about a good old Midwest meet up? Up here in Milwaukee I never meet traders. And we actually have a couple of hedge funds running up here. I don't qualify for those circles. lol I constantly have the "what do you do conversation" and when I say I trade futures, they ask what stock is a good one now. I've given up explaining futures. I need to start being more active with my IRA so I can start giving stock recommendations.
    I use ACD at a base level, and have found it to be helpful. I would love to hear about different layers to fine tune my approach, or at least look at and decide if it helps.
     
  158. There was some nice acd setups in may silver today to get you long and short...tues open was (overnight) HOD 4345, week open 4310, and 2 tick +/- pivot of 4290. _Acd, or just trading the pivots and opening ranges would have got you short down to the pivot (right after NYC open), and gave you some longs/buy covers at the pivot and even better longs back through the 4310 (wk OR), then a nice break out to add into new contract highs above 4345 (Aussie/day open)...I would consider that more or less a c up trade using buy stop limits to initiate or add above the 4310 or 4290 pivot long setups. _As for all those setups you can easily use them with 10 tick stops and time stops on the buy stop limit orders. _

    I don't frequent ET too much, wish I would have read this forum a few days ago...
    TAcalender...I'm in mequon, and just yesterday I was down on Water st for happy hour with some Goldman I-bankers up from Chi for Passover and some of the St Francis hedge fund guys (conv bond arbs) your probably referring too. _I'll shoot you and email next time we get together downtown...

    Mav, I'll shoot you and email, I'll be down in chi in the next week or so I'll let you know....sorry I missed your last messages, haven't really been on ET these past few months and took a short break from trading..

    Anyone use any of the acd methods to trade spreads?...I really think there are some good cl crack spread opportunities and 2/10yr yield spreads up here...just wish I had some acd or pivot setups to lean on in the spread markets.
     
  159. I haven't trade spreads before with it but I have graphed spreads based on ACD signals and it seems to work. It seems to identify relationships that stat correlation guys miss. In other words, finding trades that are less obvious. Mark Fisher in one of his last videos from Vegas talked about trading spreads. But more unconventional spreads.

    Sure let me know when you are in town. I assume you moved up to the Milwaukee area. How do you like it up there?
     
  160. I got long some may nat gas at 4290 stops below LOD, 77, and then I'd flip short stops above 86 then, based on Aussie and Asia opening...nat gas is such a thin mkt at this time of night tho
     
  161. Also got some sell short limits on June euro at 4613(stop), 4609 limit...if we break below 14 going to be a lot of longs stuck going to be a nice move even on higher timeframes. That trade should get hit should break immediately, stop would be on price action or at max 15-20 ticks.
     
  162. jsmooth, thanks for the response. For the last couple of years I end up taking most of the summer off to run kids here and there. I don't like jumping in and out during my trading day, so I plan the days I can trade and take the others off. I also am helping my Dad these days, and he is out in Mequon also. If a time works out I'd love to find a lunch time that works. You and the people you mention sound like you are way above my analysis, but it works for me.
     
  163. Does anyone here have a consensus about what the consistently "best" markets to trade ACD are?

    I myself would say that Soybeans are the best grain market to trade. Over the last couple of years that I have been manually backtesting results, I've only seed about 4 losing months over the entire period, and that is just trading ACD's without filtering with ACD number line or pivot ranges. Pretty impressive. Also, when beans are breaking out well the 2 cent buffer outside the opening range is not necessary to use. Just a breakout outside the first 15 min bar is good enough.

    Sugar is nice because you can setup trades with a 35 cent stoploss consistently and therefore don't have to worry about getting killed on stops. C trades tend to work pretty good on Sugar as well.

    Out of the indexes, I would say the Russel 2000 contract works better with ACD then both the Emini or the Dow Mini.

    Coffee was working well for a while, but has cooled off a lot lately, and you need pretty deep pockets to trade it. (Stop loss, plus 200 pt buffer). The buffer alone has a dollar value of about $650 per contract, let alone the stop.

    a 45M breakout ACD on /ZB has been working very well lately. 8am-845am range, 5 tick buffer. I expect it to continue to work in the near future based on the problems in the US monetary system, but beware, in the past this combo of time period and buffer has not produced great results, but lately it has been excellent.

    For the near future, I think I am going to start trading Nat Gas using ACD. Oil has gotten to a price level where you are starting to hear news stories about people driving distances to find cheaper fuel, cutting back on trips etc.

    It seems reasonable that going forward until Crude cools off, Nat Gas is going to gain at least some popularity relative to crude. Any boy is it volitile. Avoid the 1030am Nat Gas storage report on Thursdays though.

    I also think the mother of all good C down trades might be found in Silver at some point in the future. Regardless of the long term outlook for it, Silver is due for a significant and sharp correction very soon.

    So these are my thoughts at the moment, feel free to chime in.
     
  164. Mark Fisher will be on the Strategy Session today on CNBC. Check it out!
     
  165. <object id="cnbcplayer" height="380" width="400" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=9,0,0,0" >
    <param name="type" value="application/x-shockwave-flash"/>
    <param name="allowfullscreen" value="true"/>
    <param name="allowscriptaccess" value="always"/>
    <param name="quality" value="best"/>
    <param name="scale" value="noscale" />
    <param name="wmode" value="transparent"/>
    <param name="bgcolor" value="#000000"/>
    <param name="salign" value="lt"/>
    <param name="movie" value="http://plus.cnbc.com/rssvideosearch/action/player/id/3000018295/code/cnbcplayershare"/>
    <embed name="cnbcplayer" PLUGINSPAGE="http://www.macromedia.com/go/getflashplayer" allowfullscreen="true" allowscriptaccess="always" bgcolor="#000000" height="380" width="400" quality="best" wmode="transparent" scale="noscale" salign="lt" src="http://plus.cnbc.com/rssvideosearch/action/player/id/3000018295/code/cnbcplayershare" type="application/x-shockwave-flash" />
    </object>
     
  166. The answer is all markets work with the ACD levels. I have yet to find a market that does not produce robust signals. Granted I may be using different parameters then you are. I also use longer term ACD levels along with the intra-day levels.

    Here is a tip I'll give out. What type of trader are you? Do you like momentum trades or fades? If you like momentum, use very tight opening ranges. If you are a fader, use much wider opening ranges. You need to fit the ACD levels to your trading personality. This is very important. There is no right or wrong way to do this. What you are trying to do is construct levels and parameters that allow you to read the price action most effectively.
     
  167. Mav,

    Thanks for the infor. When you say "longer time frame ACD values" do you mean that you use something similar to the rolling 3 day pivot as described by Fisher, or take opening range of first day of trading and use that as your breakout/stop placement for the rest of the week? A little bit of both?
     
  168. <object id="cnbcplayer" height="380" width="400" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=9,0,0,0" > <param name="type" value="application/x-shockwave-flash"/> <param name="allowfullscreen" value="true"/> <param name="allowscriptaccess" value="always"/> <param name="quality" value="best"/> <param name="scale" value="noscale" /> <param name="wmode" value="transparent"/> <param name="bgcolor" value="#000000"/> <param name="salign" value="lt"/> <param name="flashVars" value="startTime=000"/> <param name="flashVars" value="endTime=000"/> <param name="movie" value="http://plus.cnbc.com/rssvideosearch/action/player/id/3000020455/code/cnbcplayershare" /> <embed name="cnbcplayer" PLUGINSPAGE="http://www.macromedia.com/go/getflashplayer" allowfullscreen="true" allowscriptaccess="always" bgcolor="#000000" height="380" width="400" quality="best" wmode="transparent" scale="noscale" salign="lt" src="http://plus.cnbc.com/rssvideosearch/action/player/id/3000020455/code/cnbcplayershare" type="application/x-shockwave-flash" /></object>

    Looks like Fisher's kid is getting a lot of air time lately.
     
  169. Is it just my internet connection, or is this a blank space?

     
  170. It may be your browser. It shows up fine for me.
     
  171. Mav, I only see a blank space too.
     
  172. I can't believe there are like 4 people on ET that use ACD. Maybe that is why it's so effective. Everyone else is too busy trying to pick a top in silver and the S&P instead of actually learning how to trade.

    Anyway, back to your question. No, I don't use the rolling pivots, or really any of the "macro" stuff in Fisher's book. I created my own version of what I call the Macro ACD. And yes, same principles, except on weekly, monthly, quarterly and yearly time frames. I find they work much better then just using longer term pivots.

    I honestly cannot stress enough what a great book "The Logical Trader" is for any of you that have not read it. Just as a trading book, as a way of treating the markets as a business and not a gamble. I think a lot of guys on here lose sight of the fact that this is a real business just like running a restaurant. Too many guys focusing on picking tops and bottoms and taking shots at the market. Trading is all about understanding probability and odds and payoffs. It's about focusing your time efficiently. Read the book again, only this time put a focus not so much on how does he determine the "A" values but rather how he looks at trading as running a casino.

    I've read the book several times with each time focusing on a different aspect of this business while I read it. Too many guys get caught up in formulas and variables and values of this and that when at the end of the day it's about the nuance and subtly of price action that is so important.
     
  173. Let me ask you if you think this stat (which I'm grabbing from an Amazon review of the Logical Trader book) is accurate:

    "Traders taught by Fisher have had a 40 - 50% success rate compared to around 10 - 15% for the average trader using different techniques"

    The reason I ask is that I'm pretty interested in the relative success rates of trading methodologies and trying to unpack the "95% of traders fail" statistic into something more meaningful to discern if there are any statistically significant differences in failure rates by trading methodology. This is why I started this thread last week:

    http://www.elitetrader.com/vb/showthread.php?s=&threadid=219746

    I've got my approach and I'm very happy with it, so this is more of a curiosity than me trying to figure out which approach to use, although I suppose diversifying approaches might not hurt if they were non-correlated.
     
  174. I'm not sure that 50% stat is accurate or not. I do know that Mark over the years has been highly selective of who he lets into his firm so keep in mind the guys (and girls) that trade there already went through a very heavy screening process.

    Having said that, let me say this. What bugs a lot of people when I tell them about ACD and then they say great, let me backtest this on say TradeStation, I tell them that's not going to work. They ask why not? I tell them it's a price action based system and it's highly discretionary. It's not back and white. This makes them angry and they move on to something else. LOL.

    But I've got news for everyone, black and white trading does not work. There are no magic set of rules in this game. There is no magic formula. There is no getting around the fact that in order to make money in this business, someway somehow you are going to have to become a good trader.

    Even in the book, "The Logical Trader" Mark does trader interviews in the later chapters and he points out how all these guys incorporate ACD differently. Most these guys somehow fit ACD into their own unique personality. Some traders only use certain aspects of it, others are more rigid.

    I will say this, based on what I have heard, thousands of guys on the floor over the years have used this approach to trade. Considering these guys trade crude oil, nat gas, heating oil, silver and gold, and have been able to weather the volatility of those products, I think that says a lot about ACD.
     
  175. As always, good insightful posts Mav.

    The book was very enjoyable for me and it has provided a great deal of overall market knowledge that I would never have considered without it. I'm going to read it again. I kinda sorta set it aside for now because I have not figured out a way to calculate workable opening range values being a strictly end of day data swing/position trader. (And, a not so successful just below breakeven so far this year swing trader.)

    Interesting to see your posts as just this morning I was thinking perhaps I’ll take a look at say a Monday’s action on a number of issues and then consider open/close or perhaps even the H/L as a quasi OR for the rest of the week. Thinking out loud here … then perhaps use the pivot ma’s to help pick best candidates to set next day orders etc.

    Btw Mav, do you follow the White Socks? They just got a dose of feel better playing my woeful Mariners. Gawd it’s painful to be a fan of a multi-year miserable team!
     
  176. Mav,

    I agree completely with your last few posts. I found it interesting too, if you watch the video of Fisher's son that you posted, the CNBC crowd asks him what caused to 10% drop in Crude Oil the day before...

    His response was in regards to the problems caused by front running and high-frequency trading and that "there was no fundamental reason for the selloff". I laughed when I read that, because it is the exact thing the Fisher says separates himself from the majority of other traders. "How high is high? Who knows" "the best trades are often the ones hardest to take" and things like that. Even Fish's own kid was breaking the mental framework of ACD methodology. (trade the tape, price moves before News etc).

    I agree with what you're saying in terms of the nuances of ACD as well. Something I've been working with lately has to do with finding other periods during the trading day that have ranges that are significant other than opening ranges for certain commodities.

    I also agree that ACD is just a framework for trading, and is not the holy grail nor should be interpreted as such.

    The greatest thing that ACD trading has done for me is that it laid down a structural framework for me while intraday trading. Before ACD, if I was bullish on a commodity I would buy on the open in the morning. So whether price started going in against me or going for me I still had no framework to know where I was and where I should be looking to take profits or exit my trades. So needless to say I was consistently losing money because I was completely driven by my emotions with no "map" to guide me.

    Fast forward to today and that has all changed. My ACD framework is in place....And like you were saying, profits in ACD do require additional abilities and discretion. To enhance these areas I use different tools like prior day high/lows, paying attention to economic releases coming out during the day. Something I've also been looking at lately is to see if the 30YR treasury makes an A up/or down to confirm taking index trades in the opposite direction.

    Fisher has a trade called the "Super A" on energies....He looks for an "A" to be make in Brent Crude on the overnight, and then looks crude and RBOB(Summer mos) HO(cold months) to both make A's in the direction of the brent A. This is one of his "press your bets" trades according to him...

    Basically for me, it is continuing to add those layers of confirmation that lead to trading with confidence which in turn leads to trading much more profitably. My biggest problem is that I make my money early in the day from ACD and then take additional stupid trades later in the day. Like Mav said, with the Casino mentality if we know we have a 70% chance of winning a hand, and we have won that hand, every hand we play thereafter during the same day has a MUCH less chance of success. Hopefully I will learn this fully in the near future.

    If you consistently research ACD setups across multiple markets and would like to exchange ideas, PM me.
     
  177. Yes, I follow the White Sox. I don't know what's going on there this year. I honestly thought they were the team to beat in the American League this year. Of course I have noticed a pattern over the years. When we have a cold spring here, they always get off to a slow start as the ball is very heavy. Once the heat and humidity set in, the ball starts flying out of the park. We'll see.
     
  178. On the Super A trade, I heard him talk about that as well but I don't like that trade. I noticed our markets do their own thing once we open over here. I haven't looked enough at the overnight Brent Crude but I do watch the European indices and the currencies and I notice we get many different types of trading days then what the overnight session showed.

    One of the major attributes of ACD whether you use it intra-day or for swing trading is it really keep you from over trading. Only play the hands where you have an edge. Don't swing at everything!
     
  179. I was debating whether to post this, markets trend and chop, but when they trend you want to be there to get paid. Chop to me and getting stopped out is paying tuition to the market, you have to have a system that captures the big swings to come out ahead, good trading all. :)

    slv 60 minute
     
  180. http://www.cnbc.com/id/42934352/Fast_Money_s_Line_Up_Live_from_Las_Vegas_May_11th_12th

    FAST MONEY'S LINE-UP FOR THE WEEK OF APRIL 25th

    Check out the guests lined up for next week when Fast Money broadcasts live at 12:30p ET and 5P ET from the 3rd annual SALT Conference at the Bellagio in Las Vegas!

    AT HALFTIME

    WEDNESDAY, MAY 11th
    - Sam Hocking, BNP Paribas Global Head of Prime Brokerage Sales

    THURSDAY MAY 12th
    - Leon Cooperman, Omega Advisors Chairman

    FAST AT 5PM

    WEDNESDAY, MAY 11th
    - Chris Hyzy, U.S. Trust Chief Investment Officer

    THURSDAY, MAY 12th
    - Jon Corzine, MF Global CEO
    - Mark Fisher, MBF Asset Management Founder & Chief Investment Officer
     
  181. I must have missed it in the book, but when are we supposed to exit a winning position ? It seems you have to hold on until the end of the day, is that right ?

    I think it is indeed a great system, however I cannot strees enough the importance of using it where you have volatility, otherwise you get killed. I disagree you can use it with "anything.". During an interview Fisher actually admitted it does not perform too well on the S&P500 for example.
     
  182. You absolutely can use ACD for anything and I've done really well in markets like the s&p 500. I should note that I use the system very differently then he does. I have a yet to find a market that it does not work well on. The macro even works with mutual funds!

    To answer your question, I use pivot levels, ATR and A values to exit. Let me say this again because I believe it is of the utmost importance. You have to make ACD work with your personality. What Fisher writes about in his book is untradeable. He told me this much in person. The book was meant to be a context for which to build your trading system.
     
  183. long setup here in slv long from 36.40 stop 36.15 this is an opening range breakout.
     
  184. stopped out!:)
     
  185. Thank you very much for your reply Maverick.

    I like that you mentioned ATR for exits, I think it is extremely important. I do not know specifically how you use it of course, but to me it is THE tool that tells me how much move is left for the day, and whether or not it is worth keeping the position open to catch some more, or if it is most likely done for the day.

    Someone once built a cool indicator that can be added on Metatrader, where basically at the bottom of the screen you would have a live count of points left for the day, based on the ATR and days of your choice. It is an excellent way of knowing where you are at.
     
  186. I've got an indicator on TOS that shades the ATR range and as the market makes new highs or lows the shaded area adjusts so you can see exactly where the ATR is on both the upside and the downside. Very nice visual.
     
  187. Wow, that's even better, you can actually see it on the chart then, very nice :)
     
  188. Oh wait a sec, by TOS you mean Think Or Swim ? 'Cause that's what I mainly use for stocks...is that one of the existing indicators, or you built it ? When I look under ATR I do not see anything other than the usual ATR line at the bottom....Thanks !
     
  189. A friend of mine built it for both TOS and TS. I can't build shit. LOL.
     
  190. Sounds pretty slick, anybody know of something similar for NT?
     
  191. Here is a PDF of some of the spreadsheets i use each day to get my levels for the ACD to trade...when it comes to the ES and SPY i have a few of them that i'll look at, and for currencys and energies its basically the same but with some added values showing the Asia/London OR and those PP (but that gives you a good idea)..stocks i keep it simple...ATR(30) x .25 = Aup value; C is around ATR(30)x.05; Also with SPY and ES i like to note the 7:30am price OR (if a number comes out)....In my opion the OR for spooz should be 7:30ct.

    Commodities....basically the same thing, but i'll again use two OR's, Pit/Options Open 7:15 open and 8:30 open...

    the MAIN thing i watch is the days OR in relation to the Week and Month OR....i'll be a buyer right out the open if the days OR is above the Week, Month, YR....i just buy it with a stop under the day OR with a hope of a trend day in that direction....and i'lll use the WK, MN, YR OR as price targets for other moves)....As for Cup/downs....i'll just use the opening print price with buy/sell stop limit orders...if the trade doesnt work right away on those, your seeing one of those mkt profiles that sees a few ticks of range expansion then back to a normal dist...GREAT trade to flip your position.

    Mav, If you use ACD to trade stocks, IMO, Liquidity plays a HUGE facture if you trade size....ACD got me short at the absolute high on TZOO 1-2 weeks ago, i SS 2k shares, but the huge BxA spread on just random noise got me out before the single day 10pt drop (within a few mintues)...IMO ACD works best in mkts that are purely supply and demand driven, commodity/FX futures...(you can really capitilize on the ppl that are on the wrong side of the mkt)...
     
  192. stocks
     
  193. It's always interesting to see how other people use ACD. I use it very differently then you. But again, I made it fit with my personality. It's cool to see how others set up there spreadsheets. I absolutely agree that supply and demand driven markets are where this shines, especially intra-day. Thanks for posting that!
     
  194. I gotta say I agree with Maverick....the real strenght of the system is that it forces you to be disciplined....losses will come, but if you follow the main idea, you'll see that the winners in the long run will crush the losers.

    I am also making changes to it that accomodate my trading, but in the end the main idea of respecting important levels remains.

    I am impressed.
     
  195. In case you guys missed it, here it is.

    <object id="cnbcplayer" height="380" width="400" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=9,0,0,0" >
    <param name="type" value="application/x-shockwave-flash"/>
    <param name="allowfullscreen" value="true"/>
    <param name="allowscriptaccess" value="always"/>
    <param name="quality" value="best"/>
    <param name="scale" value="noscale" />
    <param name="wmode" value="transparent"/>
    <param name="bgcolor" value="#000000"/>
    <param name="salign" value="lt"/>
    <param name="movie" value="http://plus.cnbc.com/rssvideosearch/action/player/id/3000021739/code/cnbcplayershare"/>
    <embed name="cnbcplayer" PLUGINSPAGE="http://www.macromedia.com/go/getflashplayer" allowfullscreen="true" allowscriptaccess="always" bgcolor="#000000" height="380" width="400" quality="best" wmode="transparent" scale="noscale" salign="lt" src="http://plus.cnbc.com/rssvideosearch/action/player/id/3000021739/code/cnbcplayershare" type="application/x-shockwave-flash" />
    </object>

    Here is the link in case you just see a blank space again. Scroll down, the video is on the bottom.

    http://www.cnbc.com/id/43007805
     
  196. My advice of the day...

    ...if you are using ACD to daytrade, avoid getting into positions in which the OR (or any other range you may use as reference) is too wide....always check what is the ATR of that particular stock/commodity/currency you want to trade...and if the OR is too wide, leaving no upside or downside room left...don't bother trading...'cause chances are, the trade won't go anywhere and will get you out at a loss.....
     
  197. I created a ratio that I use to put on my charts that simply shows the opening range divided by the ATR. That was very helpful. But wide opening ranges give you great fade trades especially into long term trends.
     
  198. Not sure if it is just me, but perfect example of F----- U trade today with Crude oil....
     
  199. ACD is giving me major sell signals on 6E now....shorting against the 4130 level as the long/short bias...we may see a major move
     
  200. I think we can sell these 4080 in size with a 10 tick stop, we going to fall...lets risk 10 ticks on this
     
  201. Hey jsmooth, how did that trade work out? Curious how you managed that trade.
     
  202. 6E trading around 4130-4140 level....

    using some of those same weekly opening OR values and WK high prints, we can really use those values to start looking for some longs now....i think we can extend the time frame out too, look at the daily chart, we are setting up for a nice breakout from a triangle pattern, and a downside drop was already rejected Monday morning on bad news from the EU, so we start moving back up we can have a up breakout bias.

    AUD open was around 4080 and a PP from the CME settlement prices is 4063 +/-4 (tight PP), so....so we got levels to use, trade above 4130 is bullish (also WK High prints), plus we above 4100 handle (being that level was minor Res the past few days and round number).

    Time to start getting long IMO, we are breaking out of that triangle on the daily. I would then be watching the 4130 level as real tight stop to get long on a longer time frame move...

    I'd also be putting some big size Short sell stop limits below 4078, and add more into breaks below new lows....i'd see that as a C down type trade through a tight PP....we would def make some new WK lows (and we should close on the lows of a weekly chart) if that trade develops IMO.

    Just my opinion, whats everyone else think, or you just watching American Idol???
     
  203. My weekly A up is at 1.4133. However, we have a confirmed monthly A down. So I would not be looking for any longs here. Rather I think this is a great short if we fail at this level. Also, we are going into month end so I don't like to initiate new trades at month end as there tends to be no follow through.
     
  204. I used the levels the past few days, long now, just watching the 4130, 4100 for support and Day high as Res....dont like that the HOD was a round number, usually in the overnight session/slow session, you can really sell into that, if we cant break that (now, it will be a nice move till EU opens), if no break we'll trade back down and take out all the early longs (like me buying now), it wont be time to buy till early tom. morning....thats what im watching right now
     
  205. Mav, you getting a tight PP Range for today/tomorow? you think we'll see a volitile session? I am.
     
  206. Yeah, it's pretty tight. The one thing you have going for you on the long side is the confirmed weekly A up in crude. However the spoos failed today. I'm not terribly bullish on risk assets right now as they all have confirmed monthly A downs. I'm not terribly bullish on volatility right now. We do have month end window dressing in equities though the next few days, might give risk assets a boost.
     
  207. GREAT POST, seriously! you just opened my eyes to another way to look at the mkts with ACD
     
  208. Im bidding more and adding size here, 4128-35...and moving my normal stop to more cars....if we starts trading low20s on volume ill be out and looking for something else
     
  209. nice, over 4150+ moving stops around 4120 area, and watching YEN failure at this high is my sig to get out of 6e/usd or trade into the 20s, going to roll some stops though and let some ride
     
  210. bought a few more on this way up, stops on all at 4125 on everything...playing a bigger move/breakout...time to just wait
     
  211. price action now is shit, moving the stop up...4135 level
     
  212. fuck, no more posting, got me stopped out on bullshit...ill catch you all back later
     
  213. We are kinda getting some of the same setups tonight....PP +/- 1 @ 4134 (tight)...right at the WK OR (4130)...rallied right out the gate in australia. 4200 is a key level today, if we fail up there the daily is going to show a nice downtrend trend line for next week (and just a range bound mkt in a smaller time frame chart).

    I think the reversal levels are again around 4120, but being a Fri into a three day USA weekend i dont think you'll see much follow through after an 11 ET US. I dont think we can really see a big C down type trade down through those levels.

    Best trades are probably looking for a long with stops around the LOD and WK OR 4130 area and PP, but i dont thin we'll get any good setups.

    My trade right now would probably to place some resting SS Stop limits below those daily and weekly OR numbers, and try to get long now around high 60's-70's with some initial stops under the 50 handle, then watch the 30 handle for support.

    Keep your eye on the YEN...once we break 80, its going to test those earthquake 70 lows...
     
  214. im bidding (smaller size, bigger stops) for some 4165's, stops 4148's. target continued up move.
     
  215. mkt is 76x77...you got a good trade here buy big size at 76 stops under 69
     
  216. stopped out on that
     
  217. Wow, I guess there was follow through on that weekly A up after all. Traded right up to the ATR to the exact tick.
     
  218. This is a great thread and I was hoping someone who's read the book already can answer this question for me. Can the "numberline" concept be applied on any timeframe or is it meant to apply only to the "macro" timeframe?
     
  219. What do you mean by any timeframe? Macro implies longer then intra-day. And since the numberline is rolling, there really is no max time frame.
     
  220. Well, "macro" can also just refer to covering a large number of time units, even if the time units themselves are relatively small, e.g. hourly bars, or refer to simply a timeframe higher than the one you trade in, e.g. a daily indicator for someone who day trades, but I see your point.


    I guess I was wondering if the numberline is, as they say, "fractal" so you could calculate it intraday, even if the calculation spanned multiple days using your selected time periodicity, so I could calculate a numberline for the hourly trend, or if you would just apply it at a daily or higher level.
     
  221. I gotcha. Just as there is no wrong way to eat a Reese's peanut butter cup, there is no wrong way to use ACD. The number line hinges on the importance of recording significant price action in the market through the A levels. So any significant time frame that generates important A levels I think would be valid. So if you are talking about hour fractals, the problem I see is do you really believe the opening range at the beginning of an hour is statistically significant? If you do, then go right ahead. Remember, the number line is simply a recording device for ACD levels.
     
  222. Thanks. From your response I see that the numberline is probably not going to work intraday because I don't think there is anything consistently important about the beginning of an hour, although it is true that the larger fluctuations tend to happen in the time just after the turn of the hour, at least in the ES.
     
  223. Let me add a few ideas here for you. You can slap an OR on any time period that brings volatility and volume into the market. Examples would be 9:00 central time economic reports, 1:15 pm central time fed meetings and I've found that the European close at 10:30 am central time has been useful for OR. Also noon treasury auctions. So it is possible to have multiple opening ranges during the day, just not at the beginning of an hour.
     
  224. Thanks. I've got a method for dealing with the fluctuations in volatility throughout the day, so that I'm always comparing apples to apples when it comes to price action. The specific problem I'm trying to solve is the one of "false positive" trade triggers in the context of a change in the hourly trend, either from uptrend to downtrend/downtrend to uptrend or from range to trend in either direction.

    Of course, I need a way to distinguish them from the "true positive" triggers that is objective and thought that the numberline concept might be helpful, if it could be applied at a lower timeframe than daily. I think I've come up with something that will work, though, and still be objective, so it's not just me saying "I think I'm going to skip this trade. Doesn't feel right".
     
  225. One of the key things about ACD is that it keeps you from over trading. It's actually a very passive approach to markets. I'm not sure it's all that effective is one is trying to be very active in the markets. When you talk about trend changes on such small time frames, it kind of goes against what ACD is built for. ACD is about a general bias. And the idea is the bias should NOT change throughout the day. So Fisher created these A levels as a high hurdle for the market to overcome to reveal the bias.

    I think most daytraders get chopped up trying to catch every slight move and trend change. Many days ACD tells you not to even bother trading. This is why Fisher recommends following many markets and not just one. If all you follow is the spoos, you will find all sorts of patterns and reasons to jump into trades when crude oil or gold might be offering you a perfect layup.

    I'm not saying it can't be done, I've just never seen ACD work well in a high frequency fashion. In fact, as a guy who has been around 1000's of traders over the last 10 years, I think there is a correlation to frequency of trading and failure. Especially in futures. We know that 90% of futures action is noise so we are really trying to capture that 10%. The more you try to catch every turn and every dip and every breakout and every big move, I think you are just sinking in quicksand.

    BTW, I know hourly bars don't fall under the category of active trading, just trying to point out that less is more with ACD.
     
  226. Conceptually, I don't think any market action is "noise" since it all gets put into consideration in my setups, but 90% of it is not "actionable" at the level I want to take action. My average winning trade is about 7 ES points and I enter only after a move has started and never try to pick the top or bottom tick to exit, so I don't grab every tick of a move in my direction, although I will sometimes re-enter if a move demonstrates sufficient power after I've exited. So, to grab those 7 points, the overall movement in the ES needs to be about 15 points. My preference is to make 1 or 2 trades in a day and the most I've had to make in a day is 4.

    One of the things that has fascinated me about this entire thread is that so many of the things you have said about the ACD method could also be said about my own. Now, don't get me wrong, I'm not claiming to be someone of importance in the trading world like Mark Fisher, but I also hate overtrading (I'm always looking for a subset of my trades that has negative expectancy, so I can stop taking trades with those characteristics), I also use time, price and volatility as the foundation of my strategy, I also let the market "set the bar" for entering a trade, although I don't use the opening range as my benchmark. Sometimes I will wait for an ES move of more than 10 points before entering. It's all in what the market is doing at that moment and how that movement relates to the movement nearby. You'll recognize this approach from "Reminiscences", where Livermore talks about determining "the line of least resistance" and he talks about how he was at a dinner talking to someone who wanted to go long wheat and he told the guy to wait until it passed a certain price and when the guy asked why not just buy it now, at the lower price, Livermore replied that once it passed the higher price, the probability of it going even higher increased. That's my method in a nutshell.

    From reading the thread, I think the one major difference (other than the obvious one I mentioned about me being unimportant) is that I use time as a confirmation of a price move so that I enter at exactly the point price and time jointly confirm a set-up, whereas Fisher seems to wait for some time to elapse after price has confirmed. While I can see the benefits of this (again, getting rid of "false positives"), I have also seen instances where price will keep on moving to the extent that once sufficient time elapses to confirm, a good portion of the trades profit potential is gone.
     
  227. This thread has kinda died the past month....hows everyone been doing with ACD? does anyone motify their ACD levels now that its the start of Q3 - instead of using Jan levels, using some July levels on a macro basis (start of Q3).

    Interesting action in the energy markets since the release from the SPR...Fisher was right on point when he noted some support at 9025 and some of the calendar spreads I think his son was talking about....we are getting some nice levels to play RBOB at the 3.08 breakout level, and the Crack now trading back up to 34. Their might be some opportunity in a Silver/Gold spread right now too...? Interest rate wise, the 2/10 spread has been pretty volitile...if we can firm up on these dips, around 250bp's, financials might be back in play to start buying again...?
     
  228. I'm still here. My macro ACD levels have been spot on all year. There have been some great swing trades. I don't use Fisher's 2 weeks pivot moving average for the start of July, although I believe it's probably valid.

    Let me know when you make it down to Chicago jsmooth. Ceres is lovely this time of year. :)
     
  229. Hi All,

    I'm relatively new to the thread, but have been using ACD for some time now. JSmooth had asked about whether or not anyone re-set after the start of Q3. I'd say less than a "re-set" I kind of layer a new set of data on top of the old. So while I might have macro stuff for the year, the half-year and new quarter presents new opportunities to add another data "blanket" if you will.

    I tend to think of ACD as a pile of blankets that I add and remove to find just the right temperature to sleep through the night, (if that makes any sense).

    Anywho, this week has stunk for my levels and stocks, (the ones I use for ACD) and after getting a little chopped, (my own stupidity) on Tuesday I'm watching more than trading right now. Last week however was epic! Wondering if anyone else was having a similar experience as of late, (though I'm fully aware we all use different vehicles to make it work).
     
  230. Welcome to the board. Everyone is going to have different levels but we all should be agreeing on price action. I have a level on the upside of the spoos that should hold at 1354. Crude oil is catching a bid above it's monthly. Nat gas failed at the monthly as well as the weekly. Bonds are sitting right now on the weekly at 125'04. Should hold here. Copper failed at the monthly.

    So regardless of what levels we are using we should all be in agreement that the Euro and indices are being bid well. Nat gas is rolling over. Crude is catching a solid bid. Gold obviously broke out and actually just bounced off my weekly at 1584 for the second time this week.
     
  231. Hi Maverick,

    Thanks for the reply. Totally agree, (nice bid under the mkt). Regarding getting chopped Tuesday I was still looking down when I should have been looking up, (finally). That said, I should have known, given the covering that began at the end of this week's OR, (in almost everything I look at).

    Thanks again for the reply, this is a great thread, and it's nice to be able to bounce things off of folks who have been doing this longer than me!
     
  232. Nice set-up for a counter-trend ACD trade on SPY today.

    Based on 15 minute opening range and an "A" value of 0.4, the "A Down" was almost exactly on top of the (H+L+C)/3 pivot point.

    SPY bounced right off it and never looked back.
     
  233. Keep MCO on your radar, look at todays actions/daily chart...Marks got a chapter in his book about those type of reversal patterns that span over multiple days (forgot what he calls it, but outside reversal day patterns that engulf multiple days prior) ....keep watching that one, your going to get a some nice TIGHT stop SS setups that you can potential really leverage up on...3671 is a key level to sell big size into (for this week)...plus add on some daily OR and daily PP for a tighter sell level...plus we all know these rating firms are shit and Einhorn is a big bear and short.
     
  234. i'll be playing this one the next week...just read ken shaleen's book on options, i might try to play this one with options, i got about 7k of throw away capital to experiment with the options mkt for some MCO trades...I'll keep you updated on my ACD analysis and trades these next few days...your input is also needed, what is everyone else looking at, ACD wise...?
     
  235. Hey JSmooth,

    I'm looking at F. Despite the decent report Tuesday they tanked along with the broader market anyway. I managed a weekly a down, off the back of two dailies in a row. I'd expect weak strength today and further pain tomorrow.

    I'm not really a guesser, but based on what I'm seeing, (D.C. etc) I think there's plenty more pain to come in the short-term, but that said, no reason to take any new positions this week.
     
  236. Watch the 30 year bonds. We confirmed a monthly A up and we failed at the weekly about 4 times but then broke above today. Tomorrow is the last day of the month which means we get new levels next week. I get the feeling the world is massively short bonds and the price action is very strong. These bonds could really explode to the upside regardless of the debt ceiling news. This is the trade to watch in my opinion. I think everyone is leaning the wrong way. I would look at the weekly levels next week after we get the news to take action.

    Spoos are sitting on their monthly levels. We already bounced off of them twice to the tick. But with tomorrow being the end of the month, I would wait for next month's levels to take action.
     
  237. What opening ranges do you use for weekly and monthly levels? I would think that, since there are about 24 15 minute bars in a day, then the week's opening range would be about 5 hours and the month's the first day's range? I assume that the "A" levels are derived off of the monthly and weekly ATRs as well.
     
  238. I ended up watching MCO at the open, but that thing just didnt move (wasnt volitile enough for me), and i think it could be a 2-3 days before see a major move....ill just wait to be a seller once it breaks 35 (seems like Res on the chart).

    Instead ended up looking at options on the $SPX...ended up buying 5 Aug 1250 Puts during slow lunch trade when we where sitting right below the pivot (on SPY - around 131.45 - if i remember) - bought 5 on a 9.50 bid. SPY/SPX/ES was above the opening prints but seemed like an A up fail, so my stop (and still currently is) a SPX cash close above the July Opening, or a day thats very well bid on the Aug first trade...

    At around 2:15CT, I was long 5, I tried bidding on 3 more cars once the SPY broke below the day OR (130.60 - C DOWN) - was placing the order on the BID, never got filled tho...so ended the day still holding 5.

    First support/place i'm looking to cover 1285 (200day MA on SPX daily)... not sure what my greek exposure is...but i'd be selling the Vega at vix 28-30.

    The drop after the 'no vote' is around this level, so i may be considering closing tomorrow morning if the market goes bid (opens down, is bid, and never really makes an A down), and the VIX is not moving up (from the open)...on days like this, the first place i look for is the 50% fib of the gap...

    But I'm staying short on this one right now and hopefully i can find a place to add and really push it tomorrow morning

    The trade RIGHT NOW....is playing the 4320 level on the 6e (from the long and short side
     
  239. Dont worry about specific levels/times....you need to just understand about the whole concept of ACD....any level can be an A level (but it must be a point in time that someone, buyer or seller, is pushing the market (and getting fills aggresively - they dont care that they are paying up to buy, buying the offer and placing new bids...) , and you combine that info with the "avg volitility"/ATR to see if they are keep coming back to buy or are done buying and the market makes a failed A level...your not trying to identify A ups and downs....your trying to understand what is going on with the T&S - someone comes in and buys (Aup), or he just buys, then stops (failed Aup), or hes buying the first few hours (Aup), then stops and sellers come in (C down - now all those buyers are stuck short)....
     
  240. interesting...when it comes to %rates; throughout the day i'll just watch the 2/10spread...ill sell anything under 260bp right now...i am watching the italians, if they go over 7, i'll be looking for a place to buy USD$
     
  241. My weekly level on the Euro is 142.20 and we bounced off of it almost to the pip this morning.
     
  242. i think we can just sell some 6e here (4266 )with a 20 tick give or take stop 1:15AMCT
     
  243. This is a very helpful way of thinking about the method.

    Many thanks.
     
  244. We bounced off the weekly yet again on the Euro, almost to the pip.
     
  245. Man this price action in bonds is really good. I truly believe this is "the trade". I'm telling you guys. Everyone is short, massively short. This debt news is going to catch everyone on the wrong side. Confirmations across the board. If bonds go out on the highs today going into the weekend and we pop on Monday, the shorts are going to experience some serious pain.
     
  246. Watching the auto space today as usual. Weekly a downs were made in most names on Tuesday and we're confirmed for the month as well. Hopefully you're already short, (or long puts) looks like we'll take out the monthly ATR today. I was looking to cover F at 12.22 today, but the pre-market has it trading well below there... Could make a significant move lower if/when we break the 200 day SMA on the 'ole S&P.

    Hope all you ACDers are on the right side of things today.
     
  247. My intra-day level on bonds today is 127'05. And that is currently the high. That level should hold.
     
  248. Wow, confirming intra-day A up.
     
  249. The fact that I'm the only one on ET talking about this trade only makes it better. Amazing.
     
  250. SPY with a strong rally, too. Lately SPY/ES and ZN/ZB, etc have been moving in opposite directions...looks like either a QE3 trade or a rally on rumors of a debt deal. (Not that it has anything to do with ACD...just an observation.)

    The pivot at 130.67-ish would be a good target for this leg up on SPY.
     
  251. Mav, your going to have a nice lead on that bond trade...i couldnt believe my eyes when i woke up and the 10 year was back down to 287! And the 2/10 curve is down to 248bp!
     
  252. I'm telling, this is where ACD really shines. You notice things in the price action early that other people don't see. The monthly A up was at 124'13!!!!!! And when it confirmed the whole world was talking about shorting them.
     
  253. Added to my SPX puts a few hours ago - BOT 1 AUG 1280P @ 20.50 when $spx traded back up to 1300 and failed (that was just below the SPY PP Range)...so currently long 5 1250P and 1 1280P.

    I added with the 1280 in case we retrace for the rest of the day and trade back down to the 200day MA (daily). I probably should have took some profits this morning, was up about 7k+, now i got about a 4k lead on this position. just staying long vega, hope this vix keeps moving up.
     
  254. Be careful with the index trade. We failed at the A downs across the board in all the indices. I think we could pop really big on Monday.

    First day of the month has been a killer for shorts this year.
     
  255. Unreal...127'27 trades. I think we are going to print a 130 handle soon.
     
  256. Hey Maverick, I've been watching the 30-year as a result of your head's up this morning, wow, what a trade. Looks like the signals call for some last minute deal that catches everyone off sides. Just heard a talking head on TV proclaim with great certainty that the trade was in shorting the treasuries. Ouch!
     
  257. High today was 128'18.
     
  258. So seriously, am I the only one watching this action in the 30 year? I rarely discuss trades on ET. This trade was juicy due to the debt ceiling news next week and the ACD price action which was going completely opposite of the crowd. I wanted to demonstrate how you use the levels to determine proper price action. You guys do know that you can trade the TLT ETF and get the same action right?

    I'll publish the levels next week for everyone to follow along. But let me emphasize again what made this trade so good. Everyone is watching the spoos but the overall equity market has been choppy. I don't think anyone is leaning the wrong way in stocks right now. The spoos have been range bound now for 4 months so I don't think that is the trade.

    Gold is overbought and certainly could sell off hard on the news but I think there are too many bids below the market to make that exciting. Bonds though, this trade is good because I believe the entire world is short. Bonds have been range bound the last few months but they are actually breaking out of their range now. If they continue to go higher you are going to see massive short covering. So the play is to watch your ACD levels to determine the price action.

    Next week you'll want to buy the failed A downs intra-day and the failed weekly A down. Lighten up at the failed A ups. Keep watching your levels to spot the real energy behind the move. Next week we'll have real price targets on the upside to use as our guide. And if Bonds roll over, you'll be able to spot the difference between a normal pullback and an actual confirming sell signal to get out!
     
  259. Don't worry, Mav, there are more people following this than you think. I personally have a nice sim trade going with a Long 30 yr/Short 10 yr spread. I've also been watching the 10-yr intraday for the last several months. I think it is an underrated market, ACD-wise. The intraday A-ups/downs either fail right away or run like the wind. It doesn't have giant daily ranges like crude, but its liquid for as much as you want to buy, and you can get away with tighter stops.

    I appreciate your commentary, and will definitely be paying attention next week.
     
  260. Oh...well in that case, perhaps I've said too much. :)
     
  261. Alright, check this prediction off. There's the pop. Bonds as expected coming off a few ticks along with Gold. The first test tomorrow for Bonds will be the intra-day A down and the weekly A down. Stay tuned...
     
  262. Yep...I was sitting on Lake Michigan, trying to relax, at around noon today, reading the twitter headlines, and i just had this sick feeling of death in my gut that spooz would be up big come 5pm and i should already be long now....
     
  263. Well, lake Michigan sounds nice! I think whatever rally we get this week will be faded once we get the jobs report on Friday. I'm expecting the next leg up on bonds to come on the back of that shitty report.
     
  264. time to just wait and see...we'll sell some, watching 1309.50 ES...
     
  265. Intra-day levels for bonds are 128'09 and 127'18.
     
  266. Weekly levels for Bonds are 128'28 and 127'07. If we take out the weekly and confirm...watch out. We'll make a beeline to the 130 handle.
     
  267. Weekly confirm on bonds and notes. The action is going to stay hot all the way into Friday's jobs report. The monthly A up will be an ideal target on this move. Traded a full handle up from the intra-day A up on the 30 year. Very Impressive.
     
  268. The strength in bonds continued today with a confirmed intra-day A up and a confirmed weekly A up. We closed just under the weekly. Upside target will be the monthly A up at 130'11. I would look to buy more on the dips at the failed intra-day A downs or the failed weekly A down at 127'07 if we get there.

    Notes were a little weaker failing at the weekly A up at 126'11.

    Bonds will probably chop for a few days digesting this rally a little waiting for the Friday jobs report. The bond market is totally focused on the econ data, not on the debt ceiling.

    The spoos failed this morning at the weekly A down and we popped off of it. The TF almost to the tick.

    Gold failed at the weekly A up.

    Equity vol got crushed today after being bid through the roof last week. The VIX and the TED spread show no default risk in the market. Equities will probably get a pop on any kind of resolution tomorrow. The weekly A up in the spoos would be an ideal target at 1314.

    Jobs report on Friday is going to be disastrous. However stocks most likely have priced that in. Bonds will probably a catch a bid on some more short covering.
     
  269. Mav,

    1. I cant believe your bonds are rallying so much!
    2. The 2/10 spread keeps flattening...down to 248bp now! that is the big hedge fund trade now IMO
    3. ES/Gold/CL (risk on trade)...wow what a reversal day!
    4. USD/JPY...Intervention????

    As for my option position, closed out the SPX 1250 and 1280 puts this afternoon, and bought 2 1300 calls...I was ready to close them at 9am if we opened and after 30 mins where trading above the Opening price on the SPY....(didnt happen) we pretty much just sold off on that level...I should have added (thats a low risk trade to sell more), but didn’t just kept holding with a mental stop of some time trade above that opening price (monthly/weekly/day) opening price....stayed short through the shitty 9 o clock number, which traded aggressively down through the PP (TIGHT pivot/volatile day)....closed out the puts after that and the slow trade below prior trade lows...flipped and went long around 2:30 during the Boner press conf....only long 2, so its basically a no risk trade...will add if we can trade above Mondays OR for SPY/SPX/DJI/NAS...

    Also...watching the BAC 9Calls...want to get long 100 cars if I cant get a nice ACD setup on them.

    I dont like the fact that tomorrow PP for the SPY/SPX/ES is ABOVE today’s closing price....we immediately open the day with the PP residence, but if we can get a gap up above that i'll leverage up even more on the long side...
     
  270. Intra-day A down in bonds today at 129'02.
     
  271. And what was the low today...it was 129'02.

    Intra-day A up is 129'27. We should tag that at some point today. Getting close to that monthly guys.
     
  272. We just tagged 129'27. My work is done here.
     
  273. Very admirable Mav, you make a great case.

    One fundamental thing I cannot wrap my mind around though is the idea that there are no "objective" levels. Everything I've read still makes it seem as if there are values in these variables that either work or don't. Fisher's stated himself that the numbers in the book would lead to losses, indicating there are right and wrong values that adjust to market conditions.

    If that is the case, then wider exposure of this method will dilute its results, which is pretty much one of the few fundamental truths of market behavior. If it's not the case, then there really are no precise levels, including what you've been posting (which clearly work in your context).

    Regardless, everything about this method makes sense on an intuitive level. I find a lot of value in using ACD to read price behavior within the context of what I currently have, which is systematic. It seems to help "describe" what's happening in my completely uncorrelated system that actually does not use the instrument's price as a variable at all. Because it seems to make sense, I still feel a little uneasy with people's willingness to discuss ACD.

    I wonder if anyone else might feel the same way. Is there a discrete "edge" here, and if so, can it be diluted?
     
  274. And we're there. As I pointed out in this post, the entry into this trade if you were late was looking for any failed A downs you might get. Today was failed at the intra-day A down to the tick at 129'02. If we actually confirm today above the monthly, this trade is going to keep going. I would not suggest chasing bonds but rather looking for more failed entry's to get long. The weekly is pretty much out of the question, but there will be failed intra-day A downs as well as a possible failed weekly next week or in following weeks.

    That concludes the bond analysis trade. I just wanted to walk through a trade as many people on here were not quite sure how to use ACD on the macro level. I rarely discuss trades on ET and I probably won't discuses any more. I just wanted to keep the thread alive and give an example of how ACD can effectively be used to trade any market. And bonds were a great example because many on here thought ACD might not works on bonds because they are not that volatile. Obviously I showed just how effective it can be.
     
  275. There really are no magic levels. As I've said before, ACD is a price action based system. Our levels could be off by 5 or 10 ticks but I'm pretty certain we would be in agreement about the relative strength or weakness of any given product.

    I don't think there is any way to dilute the effectiveness of this methodology. Because not everyone will use the same volatility levels or the same opening ranges or trade in the same style.

    I tried many times to "teach" ACD to guys in my prop office and it was an utter failure. Which proves that there is no "magic" involved. Trading is hard and it won't turn a bad trader into a superstar. It will simply make a good trader better. But you have to get guys to the good trader level. I think peace in the middle east might be an easier mission.
     
  276. Monthly A down in the ES is 1252.
     
  277. nice trading, remember we had qe ending and the default issue, the question was would money flow back into treasuries, bidding it.
     
  278. You don't see that everyday.

    zbu....:)
     
  279. But you are making specific calls to the pip/tick and noting how price has reacted to those levels. Certainly you can adjust the time frame in question and get different levels, but that's not a novel observation.

    How is what you're saying different from "a cup & handle can be measured on different time frames"?

    In other words, how are the principles of ACD any different from those of TA?
     
  280. Sure. The levels I use in particular will work very well when volatility is pretty constant as it's a volatility based system. But they don't have to be to the tick. There are many unique factors that distinguish ACD from standard TA. The opening range cycles are "significant" and can be quantified. The system adjusts to current volatility. The time confirmation confirms volatility and price. And the volatility allows one to have price targets. At the end of the day, it either helps you read price action or it doesn't. Like I said, the levels are not magic. I taught the system to many guys in my office and the levels didn't do shit for them.

    Because of the simplicity of the system it's very easy to compare different products against each other. That's very hard to do with standard TA. So AAPL has a cup and handle but GOOG doesn't. So what do you do? NFLX broke it's 50 day moving average but so have 50 other stocks. So now what?

    As an option trader, I see the market through the lens of volatility. That is probably why ACD is so intuitive to me. If one is enamored with fundamentals or oscillators, this will be hard to pick up.
     
  281. I'm only a rank beginner in ACD (and its close cousin, Tony Crabel's opening range breakout), but I'll take a swing at this: The entire foundation of any opening range breakout strategy is a mathematical analysis - there are an unnaturally high number of days where the open is either the high or low of the day. The entire ACD strategy is built around exploiting that anomaly.

    The follow-on observation is that, if price moves "enough" from the open, the probability of the open being the high or low of the day goes up even more. The "A" levels are rough approximations of "moving enough."

    "Day" could also mean "week" or "month." Supposedly this aberration holds true for most timeframes.

    Mr. Fisher also adds a bunch of other techniques on top of that (I haven't even scratched the surface there), but this simple statistical anomaly gets you 80% of the way there.
     
  282. Mav, i'll catch catch you at Ceres on thurs or Fri (if u aint busy), let me know i'll be on LaSalle these next few days with some CBOE option guys.

    Was long the aug1300Calls, sold em around $11 after we traded back below todays (7:30ct) OR on ES...and flipped and got long some 1250 Sept Puts...still holding..MAJOR LEVEL ON THE SPOOZ isnt the 200MAday, it the YR Opening Range....IMO..get at me cuz, @jdax414 twitter
     
  283. Thursday will be nice weather. Outdoor patio at Ceres sounds great! I'll hit you up on twitter.
     
  284. Bonds...131'11 high this evening. Wow. Very impressive.
     
  285. So the monthly A down in the spoos is 1252. If we close above there today then we did not confirm and this will more then likely be a short term low for the market. Textbook wick on the monthly A down. The Wicks are the perfect signals at failed A levels. Classic.

    A bounce in the market should put some pressure on bonds and that 132 level today "should" be a short term high. But we did confirm on the monthly so I would be looking to buy any failed weekly A downs in the following weeks.
     
  286. So that concludes the bond trade. The above was from Aug 28th.

    [​IMG]
     
  287. Let me comment on this last thing. A poster was asking about absolute levels earlier. So I had 1252 for the monthly A down. It could have been 1255 or 1241 or 1260 for that matter. It's all about the price action. When I look at all the stocks I watch, I would say 80% of them put in failed monthly A downs on wicks today. Plus add the volume spike, the action in the vix (volume not price) and one could discern that today was a probable bottom barring taking out today's low tomorrow or Friday.

    This was the point I was trying to make earlier about different people having different levels yet all reaching the same conclusion. It's not about the exact price level but rather how the market is acting around those price levels.
     
  288. The TED spread over the last 3 days popped over 50% from 16 to 26 which is the high end of the "normal" range. That's a pretty big pop and demonstrated better then the VIX the fear and panic. The VIX did some very nice volume though even though we couldn't break 25.
     
  289. Thanks, this explanation is helpful. To narrow it down, if I understand you right, you're saying the ranges can be measured mechanically, but the real value comes from using both volatility and time as the main variables by which you evaluate price action. Classic TA is mostly just concerned with price history.

    I don't yet have a sense of how ACD can be used to compare different instruments, but seeing what you guys are talking about here helps a little. My past attempts at cross-market comparisons have created way too much complexity.

    The reason that ACD appears to clarify what I'm looking at with my own system, so far, is that it helps <i>visualize</i> volatility. An expansion of volatility is a secondary effect of the setups I take, but it's not something I've tried to deliberately measure and trade off of. Gives me food for thought for testing certain ACD hypotheses.

    Thanks again for your insights.
     
  290. What you wrote is an excellent explanation for those looking into this. It doesn't exactly get at what I was asking (i.e., how is this not a flavor of TA which is susceptible to being diluted with more people using it), but I think Maverick provided some ideas along those lines that makes a bit of sense to me. Many thanks.
     
  291. Failed intra-day A downs across the board in the indices! Pretty much to the tick.
     
  292. They broke. Watch out below.
     
  293. mmfi stocks over 50 day avg, you can get this on barchart.
     
  294. MMFI closed 3.76 today. Lowest print was 2.11 Oct. 2008.
     
  295. Market is certainly over sold. But this is where ACD keeps your discipline in check and keeps you from trying to bottom pick the market early. Was not expecting to see the VIX at 50. These selloffs in August can be brutal as there is no liquidity and no one wants to make large capital commitments in August.
     
  296. Maverick, today's fed statement explains
    what you saw with ACD on August 2 in bonds,
    which at the time seemed weird.
    Who knows these things before they are announced?
     
  297. I'm not sure what the difference is. I think it's the same. sometimes we simplify things and it comes across as something new. All these chart patterns and stuff all come from a deep analyses.

    What i see is this being a possible difference:
    TA would not memorize a pattern but will recognize it when he does his magic.

    While others will have taken the TA's ideas, simplified it and made some memorable patterns that one can easily spot.

    So one uses the others ideas simplifies it and focuses on memory. while the other develops and does studies to identify patterns.

    Even a moving average in the end is TA. Its manipulating data to find a trend.

    Just my thought i dont even know what acd is but sounds like it may have some thing to do with my style



     
  298. at any give time there is a place for price to go up and down. We can find these spots anytime. a number of factors can guide price to a predetermined place. Like news.

    sure the news will dictate direction. but studies can dictate where we have a strong support and resistance... even if price has never been in that level.

    Also based on peoples tendencies not only can we spot where they will resist price, we can equally see when they will.

    I still don't understand it and yes at times it feels like i am predicting news. Maybe I am ? maybe price does what it is to do and we actually follow ? our buying and selling is dependent on the chart. so in essence it is possible that we all follow a given set of rules ?





     
  299. Wow, you really had to white knuckle playing any weekly signals this week, but ACD delivers again! My favorites in the auto space all lived up to their weeklies set Monday/Tuesday. That Fed statement was visual chaos, but I had the fortune of of remembering something Maverick posted once upon a time ago about slapping an OR around a Fed statement, or bond auction, etc.

    Thanks Mav, that intra-day bounce off the OR created by the Fed Tuesday really made my week!:D

    Hope everyone's ready for the pain next week, (unless I missed something and the whole world suddenly got better/fixed).
     
  300. Do you know what the yahoo symbol for that is?
     
  301. I don't know about pain next week, but the weekly ACD signals will be your tell. Don't try to go into the week with a pre-set idea of what you "think" will happen or worse, what you "want" to happen.

    Here is another way for you to use ACD. Since this is a price action based system, paying attention every day to the A confirmations is huge. This is where Fisher created the 30 day number line concept.

    So what I've noticed this week is the market, despite all the volatility we have had this week, has not been able to make A downs. This is very important. Weak markets should be able to confirm intra-day A downs just as strong markets should be able to confirm A ups. So even though the price action this week was crazy with huge price drops, we never actually traded through the A levels. This tells me the market is beginning to stabilize. Now all that could change next week, and again, the tell is going to be the A levels. Both the weekly and the intra-day levels.
     
  302. I don't know what it is, if there is one.
     
  303. Hi Maverick,

    What formula are you using for A and ? Unless of course it is proprietary.

    Thanks
     
  304. Maverick,

    Thanks as always for your insight. I was getting caught up in the monthly levels and having seen an A down thought maybe last week was something of a head-fake before more monthly pain. Truly appreciate the wisdom you share with us here!
     
  305. Today was another good example. A lot of movement up and down but all we did was fail at the intra-day A up and the A down. Basically another range bound day. There really is nothing to do right now in the ES. We are in the middle of the weekly ranges. I have the weekly A up at 1216 which one could use to get short on the monthly A down. The weekly A down is 1166. So I would wait for one of those two levels to do anything. Right now the market will just chop you up. Bonds and Gold are far better trades then the ES right now. Gold has already confirmed on the weekly A up.

    A big part of trading is focusing your time and attention on the right markets. Don't trade the chop! This is one of the biggest assets of ACD is keeping you out of a bad market.
     
  306. Another failed A down today in the ES at 1184. The chop continues.

    Bonds rallied 2 full handles off the failed A down intraday.
     
  307. Great thread- I'm now looking forward to buying the book.
     
  308. mav, why does fish use the same A and C values in stocks...but not in commodities? ive wondered this for the past year after reading, re-reading, and watching his vids (i cant figure it out)? when it comes to stocks i'll just use 25% of the ATR(30) (for both the A and C values): this is according to his website FAQ....why use the same value in stocks but not commodities? any ideas?
     
  309. To be honest, I never understood why there were different A and C values. I personally use the same values for A and C. And it seems to work for me. I signed up once for a free 30 day trial of his website and I never could figure out how he was changing the A values. He obviously has his reasons. I understand how I use my A values so I just use what works.

    I think Fisher was never a stock guy so I think he may have felt that he had no particular understanding of why he should change the A and C values for stocks.
     
  310. One other thing I want to point out. There are a lot of guys on ET that go apeshit over large moves up and down. The A values adjust to volatility so they bring a sense of normalcy to the market. They keep you grounded. When the VIX was at 15 we had 10 handle ranges every day in the ES. With the VIX over 30, we now have 20 to 25 handle ranges. So just take whatever move we get and cut it in half if you have to get an idea of price action. This is what makes ACD so effective is that it immediately adjusts to the new volatility and gives you a proper perspective of price action. The same is true when ranges get really tight and we have 6 to 8 handle ranges in the ES.
     
  311. I'm still shocked. Bonds were 126 at the time of this post. Now 140'23. Challenging the highs from the 2008 crisis. Unreal.

    [​IMG]
     
  312. Hey Maverick,

    Again, kudos on the Bond and Gold trades that you pegged in late July. I'm curious, was it the number-line that tipped you off to those moves, or was it just a time frame encompassing the month of August along with the fundamental decline in world financial markets?

    I hope my question isn't too intrusive, but I do appreciate all of your posts here!

    As always, many many thanks!
     
  313. I haven't used the number line in a while but that really works. It allows one to see price action that is not obvious to everyone else. Having said that, I can pretty much tell you I know about what the number line is for any given product because I watch all the A levels like a hawk on every time frame.

    So on the bond trade, I kind of used all the tools. One, we had a monthly A up in July at 124'13. This was coming after a very tight range bound month in June where volatility was really tight. Now normally the monthly A up by itself would not have gotten me "that" excited. However, that combined with everyone saying bonds were going to tank and interest rates were going to explode to the upside, that got me interested. BTW, this is one of the reasons Fisher and me, read everything! Everything under the sun, CNBC, ET, blogs, etc to try to get a gauge where sentiment is and where everyone is leaning. Some of Fisher's favorite trades is when he sees an A up going opposite of what everyone is expecting. So what we had here was bonds are going to zero, interest rates are going to explode and we were all going to die. Then I see this monthly A up in July and it confirms. That made no sense to me.

    Then we had this debt ceiling fiasco. We had the rumors of our debt being downgraded. We had the cable news talking about this every night to no end. Yet bonds were being bid. Still made no sense to me. The following week after we got the monthly confirm, bonds went back into a tight range and actually failed three times at the weekly A up. Then a buddy of mine who runs a CTA told me he was putting on a big short position in the ten year saying that notes and bonds were going to crash because the government was going to shut down and our debt would be downgraded.

    This was the final straw. I said to myself, with all this going on, if we actually take out that weekly A up, then the whole world is wrong and these bonds are going to fly. Sure enough, going into the debt ceiling deadline, bonds broke above the weekly and confirmed! That's when I knew, the shorts were going to get crushed. Right after we took out that weekly at the 126 handle, it was over. We went up in a straight line for the next 2 weeks. As we went into August we confirmed yet another monthly A up at 130'11. Then we kept going all the way to 141.

    This is how you put everything together. You are watching price action, news, sentiment, A levels, everything. And all along the way you are looking for any signs that the move is over. So you are looking for weekly A downs. We got none. You are looking for intra-day A downs. There were none. In fact, day after day, we kept bouncing off every intra-day A down we touched. I have no idea what the number line count was, but it had to be through the roof.

    So that was the thought process throughout the whole trade.
     
  314. Great stuff Mav, seriously.
     
  315. Agreed. Maverick, thank you so much for walking us through the thought process here. Valuable stuff!

    It should be an interesting week then. I know we've got the monthly a up in gold/bonds, and a monthly a down in just about everything else. I just wonder, we've run way past our ATRs for the time periods, and will we start to see profit taking in winners and buying in the losers?

    We'll find out this week I suppose.

    Again, many thanks Maverick.
     
  316. Hi everyone,

    I've read almost every post on this thread regarding ACD and understand that its use in trading.

    Regardless, I just want to confirm a few things - in particular when Maverick refers to the A and C levels for different time frames (intraday, weekly, monthly, yearly).

    You mentioned a good starting point is 20% - 25% of ATR(5) to ATR(10) calculation to determine ACD levels. However for intraday, would that be ATR of the last 5/10 days or ATR of the timeframe dictated by your Opening Range (say 15 minutes), then last 5, 15-minute bars

    Conversely for weekly ACD levels, if your opening range is 1 hour, would you be using ATR of the last 5/10 hourly, daily or weekly bars?

    IF you decide to use an opening range of 2 hours for the weekly ACD levels, would you be looking at ATR of the last 5/10 2-hour bars.

    I understand that the levels are set as a level of which you consider a move significant based on the volatility. I just have a bit of difficulty understanding when you guys refer to ATR(5), ATR(10), ATR(30) what time frames you are actually using corresponding to the time frame in question.

    Thanks,

    Felix
     
  317. Hi Felix,

    While there really is no "wrong" way to use ACD, you have to think of the ATR as the average range of the time period you're evaluating. So for instance, while you might use a 15 minute opening range, that's not really the time period you're evaluating, rather, the time period you're evaluating there would be about a day, (I'm assuming you'd use that for a day's opening range, you may use some different time frame).

    Just think of the ATR as the range that the underlying can move over the period of time you wish to evaluate.

    I hope this is helpful.
     
  318. Hi Quon,

    Thanks for your prompt reply

    I understand there's no wrong way but I want to identify the general approach that people have been using to figure out why the A level is calculated the way it is.

    From the sounds of it, I am still evaluating the daily period (even though I am looking at the intraday movement) then I should really look at the average daily volatility of the past 5-30 days to identify how much movement can happen that current day.

    The ACD levels as suggested by some users could be 20-25% of the average daily volatility to identify the significant levels where bullish/bearish bias is established.

    Again the % of the ATR used can be dependent on how big the opening range I decide to use, which is also dependent on what I determine to be appropriate for the security I am trading. The style / framework factor also comes into play.

    Thanks,

    Felix
     
  319. OK, so a good old friend of mine from the P&R forums decided to come up here and give me some criticism of my method or perhaps my application of this method. He sent this to me over PM. I won't name the poster as it's irrelevant. However, I do wish to post his comment and address on here as there has been very little commotion on this thread (which has been good). For the record, I love criticism and actually don't mind people posting some on this forum. I'm not sure how sincere this poster really was, but I'll address it none the less.

    His comments:

    "Bottom line: You either follow a method or you don't. You either take a confirmed signal or you don't. If you trade the ACD method, or any other for that matter, then you take its confirmed setups. Period. Everything else is only so much fluff & fold, including what your CTA friend does. If you hold this ACD method in such high regard, would you not have taken a confirmed setup irrespective of sentiment et al?

    May I recommend Occam's Barber Shop for a really close shave?"

    OK, so let's get right to it. I know the phrase price action can be very ambiguous to many on here. So let me try to define what I mean by the word price action and point out that the ACD methodology IS a price action based system. It is NOT a rules based system. A rules based system usually follows a logic of "if/then instructions. If this happens, then do that. It's very static and rigid and quite frankly, rules based systems work much better in predictable environments, certainly not the financial markets.

    Price action is about making decisions based on the interpretation of several variables. It usually leans on the trader's past history, experience, knowledge and ability to recognize nuance and subtlety. The purpose of using price action over a rules based system is to spot and locate opportunities in the market that are NOT obvious to everyone else. Static systems are the opposite. Because static systems regurgitate the same variables over and over again in the same rigid manner, they can easily be spotted and acted upon by anyone that pays attention to it. And believe me they will if those static patterns happen to be working.

    The reason why ACD cannot be a rigid rules based system is because there would have to be an assumption that the input variables are absolutely correct, which we have no idea that they are. Those input variables are the ATR length, the width of the opening range and the A variable. Since these are just "approximations" we cannot take them as absolutes.

    So since we know there is some wiggle room in these input variables, we have to accept the fact that they are not always going to be precise and we must use them in a way that gives us some allowance for deviations. By utilizing a price action approach where we are watching several markets and using all the data available to us, we can actually get a much clearer picture of what is happening.

    I have often described ACD as lens in which we view the market. We still have to trade and make decisions, but ACD makes those decisions more clear and precise.

    His comment about confirmed set ups. There are NO confirmed setups in ACD. Again, the whole word confirmed brings us back to the rigid world of rules based trading. That simply does not work for me. When I use the word confirmation as it pertains to an A level, that simply means it has confirmed in "time". It does not mean close your eyes and take the trade. There are many reasons why I would NOT trade a confirmation on any time frame and I've gone over that in detail and have given specific examples.

    Let me say this again, the best trades one finds in the market are usually the ones nobody else sees. ACD gives you the lens to find those trades. The whole world can identify a trend. The whole world can spot new highs and new lows and which products are breaking XYZ moving avg or taking out some critical support or resistance levels. I don't take trades that the whole world is running into. Not because they are not going to work, often times they do. But they will be messy. Stops going off all over the place. I prefer the trades no one is watching or levels that no one is paying attention to. Even better if most people are on the other side of the trade.

    To sum up, trading is not easy. Very few people will ever succeed at this. ACD will not make a bad trader into a good one. It will only make a good trader better. There are no magic levels. There are no magical setups. Trading is going to require you to go against the best people in the world and beat them day in and day out every single day. It's going to require more then rules to succeed. It's going to require more then just a "system". I also want to point out there are a millions ways to use ACD and the way I use it is not the "right" way. It's simply MY way.

    Hopefully I have addressed this PM in full. I always welcome comments and feedback. Both good and bad. It's possible the other poster simply doesn't like me and wanted to mouth off. Fair enough. But in case his comments were sincere, my above post should be an adequate response.
     
  320. So after this long detailed explanation, the poster who PMed me still thinks all I did on the bond trade was get long a confirmed breakout. For the record, the bond trade was NOT a breakout trade and I went through the logic in my previous posts. Anyone that pulls up a bond chart can clearly see that the price level where the monthly A up was in July was not a breakout and was in fact in the middle of the trading range of the previous month. That was my whole point!

    What I've learned about ET over the years here is it doesn't matter how many times you say something or how well you explain it, people will believe what they want to believe.
     
  321. The most vocal are those who have a vested interest in disagreeing, but they're not everyone.

    There's something to be said about cognitive dissonance and the people who talk a lot on ET.
     
  322. This is well put. In my experience, the loudest folks are typically the ones who are getting their hats handed to them, and feel the need to "hate" if you will.

    Maverick,
    I think I speak for many of us when I say how grateful we are that you share so much of your hard work here at ET. I think for most people it's just impossible to believe that any level of interpretation could color a richer understanding of ACD. Hell, just last week I was on vacation 6 hours behind est, (the wife forces me to leave a convenient time zone so I don't trade-and I completely agree) and I spotted a move that was the near polar opposite of the monthly. No signal told me to get short, but I did, and it ended up being the best trade of the month!

    ACD is a framework though which you have an opportunity to trade, but you have to know how to trade. Would you build a house knowing only how to swing a hammer? Nope.
     
  323. I concur with others' sentiment on the value of this thread. I've been lurking around ET for awhile, and I gotta say this is one of the most informative and reasoned threads I've read. Much food for thought here. Thanks a ton for your insight and detailed explanations Maverick.
     
  324. it's the only reason I don't have this fool on ignore. He is a trader, so I put up with his ass. jk, Mav, jk:D
     
  325. One more thing, everyone cannot read price action in any form. They are simply not wired to do it. So one of your fellow righters cannot trade. Help him in fight club, but he has all the info upstairs to help him. He is on his own.
     
  326. Great. Someone left the back door open and some of those rodents from P&R are sneaking in. Just kidding RCG. You are always welcome. You have no idea how flattered I am that you a"putting up" with me. :D
     
  327. You're welcome. I have to say, I'm very pleasantly surprised that this thread has not been infested with trolls yet. Usually they look for high quality threads where everyone is getting along so they can piss all over it. Knock on wood....hope they stay away.
     
  328. Yes. Thank you. I read but rarely comment. Today's action is indicative of new (or should I say ongoing) bearish sentiment. The rally got sold. Few are willing to buy at the top of the latest rally. Not very reassuring to longs.
     
  329. We failed at my weekly A up today in ES at 1170. This brings the 1102 weekly A down price target in play. However, let me point out that I'm not sure the indices are the best play right now to play the deflation trade. I only say that because the indices are very messy and crowded.

    Let me point you towards the Swiss Franc. We bounced off the monthly A down at 124.32 and today we bounced off the weekly A down at 125.08. I'm referring to 6S (Swissy Dollar). The swing high on the market selloff was 1.4167. I think this trade might be less messy then playing the spoos.

    Another product to watch is Coffee which is quietly breaking out. Monthly A up was 252 and it closed above the weekly today at 275. The level to watch is the QTR at 283. We take that out and she might gun it for the highs at 309. The Ten year (ZN) bounced off the weekly A down today at 129'18. This trade is also much cleaner then the spoos.
     
  330. spy gld
     
  331. Not a good sign when people start chiming in with off-topic calls not related to the method though. It be startin'.
     
  332. speaking of Richard Nixon, there is great line in the movie about watergate, the line is "follow the money", all small traders are in the shadow of the large, and I mean large trading institutions, there are the majors, jpm, gs, bridgewater, etc. and then the smaller major players, funds, hedgies etc. I have seen quite a few arguments over the years regarding how to " follow the money" . flows, TA, volume analysis. The reason I post Rickards stuff is because he is the only person I have seen in the vast empire of trading, media and general talking out of one's ass seen daily here on ET, that gets the REAL tug of war between inflation and deflation, this is some real serious and scary shit. Price is everything to buyers, small businesses come and go, the macro is where the big money is made, why has the stock market deflated lately, we were just at 1370 with mutual fund hacks calling for 1450 etc. So what is really going on? What are the big houses seeing that we don't see? Remember tomorrow GDP comes out, be prepared.
     
  333. I have been following this thread with more interest for a few weeks, and went back and read the whole thing. All I can say is thank you to Maverick, and the others who have chimed in with their insight, warnings, and various styles of use of the method.

    I went out and bought the book, and am about 1/2 way through. What I like about it is that I like the style of trading. It seems to keep you from getting hurt, and its strict enough to avoid overtrading. And it seems intuitive in the sense that it tries to stack different factors in your favor, b/4 you take a trade.

    It seems to focus on the things that I have been studying, and trying to build a system around. I have been looking at developing a system based around price action, volatiity, and basic statistics of equities based on behavior in specific time frames. Focused on price moves from the opening print. (ie, if the stock moved x% from open by 9:45, what % of time did behave in x fashion, type stuff..)
    I just havent been able to put it together, but this seems to give me a great template/framework to build upon.

    This acd methodology incorporates alot of that, but just does it based on a OR, individual criteria for A formations, and some other goodies.

    (I also like that volume isnt stressed. I have ever been able to make heads or tails of anything meaningful looking at volume in different forms, and pretty much thought volatility changes seemed like a better thing to focus on.)

    I already have some questions regarding the method, but will withhold them until I read the book completely.

    Thanks again for all the info.

    edit: (I cant help myself, Just one question : )) I am an equities guy, and I have read over and over the need for "sufficient liquidity" in w/e you choose to trade ACD. Can someone who trades equities with this care to elaborate, on why it supposedly works better?
    It seems to me like more of the volatile (frequently consistant, wide % intraday ATR issues) are around the 1M-7M average volume stocks.

    Or does he mean "unusually" volatile (news/etc) where there is unusually alot more people trading?
     
  334. I think since Fisher comes from the futures world, the lack of liquidity in "some" stocks scares him. Keep in mind, he doesn't swing around 100 shares of stock. Also keep in mind he wrote the book in 2001 or so and back then he was advocating using the bottom of the opening range as a stop. In some stocks, if they roll over and take out the lows of the opening range, they could gap down dollars in a hurry.

    I personally think all products work equally well with ACD. I wouldn't be trading penny stocks or stocks that avg less then 250k shares a day. My personal experience shows that ACD works quite well with equities.
     
  335. Just throwing my approach out there for a variation on the theme.

    Some premises I am forward testing are continuation moves running into the next day's open, without exiting earlier unless on a stop. Entering at the A level, and at C on a failed A-up/down, given enough time holding above/below. I'm trying to supplement my current medium-term trading with shorter moves, as well as use certain setups to enter into positions earlier. But I don't have much success beyond closing profitable short term setups at the next day's open. How to put the puzzle pieces together to better visualize the big, longer term picture is what I'm ultimately after.

    Cross-market analysis requires a bit of nuance I'm not ready to bring in just yet, but seems to offer the most promise down the road, as my main method requires tracking the relative behavior of other instruments in order to trade the indices. This is why I was drawn to ACD. Building a custom indicator based on ACD principles across multiple instruments is not easy to approach in a formulaic manner though.

    For those of you who incorporate weekly levels, do you just use Monday's H-L +- A&C, based on a % of the 30 ATR? How do you use the weekly behavior in relation to intraday -- as a filter for the latter, or just to establish longer term positions, as Maverick demonstrated?
     
  336. Coffee 284

    [​IMG]
     
  337. Another great heads up! Thanks again Maverick, much appreciated.
     
  338. As you can see, Coffee was quite the out performer for the month of August. Once again showing that "product selection" is very important to making money in the market.

    [​IMG]
     
  339. For something like this, are there any other commodities you look at through the lens of ACD to inform a trade in coffee?

    Or do you feel comfortable with the price action of C alone?
     
  340. The answer is, it depends. For example in the grain space, you can look at what soybeans, wheat and Corn are doing and get an idea of which product is really breaking out. Same with fixed income and currencies. With coffee, sugar, cotton and coco, I just look at them individually. I'm sure there are plenty of fundamental guys out there that look at all sorts of stuff, but I try to keep it simple.

    The real important thing for me is finding trades early before everyone else does. The whole world is watching the breakouts in Gold for example. Very messy trade now.

    Last year ACD spotted a huge breakout in Cotton at 95 when 95 was a 20 year high. My CTA buddy explained to me that from a fundamental perspective cotton really can't go much higher. He later went on about 115 being the all time notional high during the Civil War. I told him it was a confirmed monthly A up and it was the first real breakout in quite some time and nobody in the media was talking about cotton yet. Well, we went from 95 to about 219 shattering every record on the book, doubling the levels from the Civil War. By the time cotton got to 150 CNBC was talking about cotton every day and it started to get messy. Limit moves up and down every day.

    I cannot emphasize enough the importance in product selection, getting in products that are not over crowded and spotting tells no one else has picked up on yet. Just remember, when you get long or short with the crowd, your stops are next to their stops as well.
     
  341. Great insights again Mav. You're describing the same phenomenon as Fisher's analogy of being the first to the door before everyone rushes the exit of a burning theater -- just on a long term basis rather than overnight. I think he's off on some things (sushi roll, flattening out of lagging moving averages, etc.), but the whole of market psychology in that one analogy seems to be right on. It's encouraging that this is a method that helps visualize what that behavior looks like.

    It's taken me a few years to move away from trading the price action of one instrument alone, and now I like the inter-market stuff. But it's good to see ACD as a lens can point out a setup like that cotton trade looking only at the commodity itself. Thanks again.
     
  342. This thread finally made me go out and get this book. It fits perfectly with my volatility based models I already have. But even if one has no system, this is a good place to start if you understand the concepts. On a preexisting system, ACD will help ferret out false signals. That is what I see in it anyways, also a good way to develop a trail stop method.

    Nice work starting this Mav.
     
  343. Aw shucks RCG. I'm so flattered. :)

    Down in P&R I got the impression you didn't think I traded or understood markets. :D

    Well, good to get you out of the basement of ET. There is more light up here and a little bit more friendly. Welcome on board. Have a cocktail. Stay awhile. :)
     
  344. Throwing out more ideas, just to hopefully keep some discussion going.

    My primary trading measures the rate of change of various inter-market relationships, and my long term goal is to build upon the tools I've created to incorporate ACD.

    Right now I can only trade the equity indices because the relationships I track only show profitable signals there. Using ACD would allow me to expand the instruments I trade while normalizing, and maybe refining, a method of tracking relative changes in volatility. Diversifying across time frames would also help this.

    I understand Macro ACD uses a running total of recent A or C entries, failed A entries, etc. Maverick's also been using monthly levels for various instruments. I'm sure his team's got their own proprietary variables for that. I'm trying to build my own to track, but it is arbitrary and contrary to the theory to use the beginning of the month to set the OR (unless transactional volume is statistically significant).

    So, starting with the indices, maybe CPI, BLS nonfarm payroll employment reports and FOMC meetings seem to be logical opening range guidelines. They're cyclical, so it's easy to code, rather than readjusting for important events. The goal is to cast a good net between events to define when significant positions are established. That's what I'll be coding up next. Has anyone else found those events useful for longer term ACD?
     
  345. Sounds like a pretty good idea there. I especially like the idea of using the BLS non-farm report to build a monthly level around. That said, I haven't used it in the past myself, (my levels tend to be a bit more pedantic-happy to take the meat of a move and leave some on the table so long as I have some consistency).

    From an ACD stand point you've got guaranteed volatility, at the begining of a timeframe, that's cylical. Kinda sounds like you're checking all the boxes, and you've certainly given us all something to discuss/think about. Many thanks for the post!
     
  346. Thanks for the comment. There are a lot of variations possible on the basic foundation of ACD, so hopefully the idea might stimulate some thoughts from others.

    Yes, first Friday to second Tuesday should be a decent range to start with. I'm uncertain of how wide the net should be as well, from a trend following standpoint, but once I incorporate my other macro indicator it'll help to "eyeball" it. 3:20 ratio of days per month makes intuitive sense to me.

    There's also PPI, ISM, jobless claims, etc. But in theory, depending on how long term of an indicator you want to build, it'd make sense to stretch the OR across as many cyclical reports as possible.
     
  347. You can get very creative with ACD. You might also look for big volume days, news event days, gap days, etc. All those days can be used for OR.

    As I've said before, you will find your trading improve greatly when looking for things that don't happen often. Look for the rare trades. The trades no one is talking about. Look for things that don't make sense.
     
  348. Good call. Coffee has continued to climb!!!
     
  349. This is something I was thinking about, and would like feedback on from anyone in the thread. I guess it is a 2 part question.

    1) Is anyone using more of a "macro setup" like a daily chart technical formation pattern as a point of interest when looking for candidates? (an example would be a wedge forming or major S/R level)
    2) With regards to "high volatility", can anyone define what they use as criteria for this? What I mean is this:

    A stock can be volatile (large % atr's intraday) on a regular basis. In other words, its normal to have decent swings, but not unusual. In other words, its normal to have large intraday swings.

    -or-

    A stock can be "recently and unusually" volatile in the last week or so (news, etc) but normally average.

    So I guess my question has to do with how people defiine volatility, and is one of my criteria more applicable to this situation.
    I ask b/c with situation #1, you will have naturally larger ATR levels, even if a tighter % is found to get your A's...

    With situation #2, your "normal" ATR will be alot less (due to normal conditions) but since the stock NOW RECENTLY) is whipping around, it might work better.


    or am I just overthinking this thing, and barking up the wrong tree?I am asking this b/c I trade equities, etc.
     
  350. I think you may be over thinking things too much. Keep things simple. Ask yourself some basic questions:

    1) Does the product look strong or weak?

    2) Is there anything unusual about the behavior of the product right now?

    3) Is this product being heavily watched at the moment?

    I actually don't like when a product becomes more volatile the normal because more often then not, that means the move is just about over. Volatility is nature's way of bring back normalcy to a product. You want to get in the product before it becomes overly volatile.

    Also, just a general recommendation. Please don't add too many other indicators to whatever you are doing. I've never met a profitable trader that uses too many indicators and needs so many confirming indicators. What makes price action is effective is that it's simple. Indicators kill price action because it destroys the purity of it.
     
  351. BTW, for those of you do not wish to trade futures, coffee has an ETF, JO.

    [​IMG]
     
  352. Just adding my two cents, (for what it's worth).

    I think it's important that you find something that's confirmed an A on a longer term time frame, and yet not become overly volatile just yet. A's tend to occur before the product really explodes to the upside, (look at Maverick's calls on Gold, Coffee, and ESPECIALLY the 30yr) and just because something confirms say a monthly A, doesn't mean it can't pull back too, (this is important).

    Sometimes you're in the trade while it's making an A. If so, great, but sometimes you're not. No worries there, keep watching, and play a favorable bounce. Remember what Fisher says about confirmed A's - they can pull all the way back to the bottom of your OR without being "broken."
     
  353. Thanks Maverick,

    Great article. I've seen his trading seminar videos, (try to catch him on Fast/Sqwak/Strategy Session as much as possible) and have been well aware of his affinity for nat gas, but he makes some very good points here and kind of ties his thesis up with a bow. Favorite piece,

    "As these paper currencies continue to get debased in a revolving currency devaluation, crude oil is going to keep increasing in value along with gold and all the other metals."

    Again, thanks as always Maverick. Much appreciated.
     

  354. I am a bit confused. Are you saying those are desireable traits? If so, I thought earlier you said that when everyone is watching/trading the same thing, its not a good quality. But isnt that what brings volatility?
    Sorry, I am kinda confused on the point you are trying to make.

    I guess, (and perhaps I am wrong) since volatility moves in cycles, I was thinking find something that has recently been volatile, (or has the habit of expanding and contracting rather frequently), wait for it to settle, than anticpate the next move or failure...

    Absolutely. I learned this awhile ago. In fact, I skipped the section on moving averages in the book.
     
  355. Volatility usually means the trade is becoming crowded, over leveraged and the price action is driven by stops. It's very hard to make money in those markets. Usually "daytraders" want volatility because they have a fixed amount of time to exit a position. A swing trader does not. A swing trader wants trend, not volatility. Of course all traders want movement, but not erratic movement.

    It's very hard to enter a swing trade with a stop if there are stops all around you and people jumping in and out with massive leverage. I much rather have a quiet market that is being slowly accumulated that is trending.

    One of the mistakes a lot of newbies make is looking for volatility. It causes them to get into stocks or commodities "after" they have made big moves and now the product is whipping back and forth stopping everyone out. It causes them to over trade and also to build bad habits i.e taking profits too quickly.

    Once you see an explosive move in volatility, usually it's best to look for trades elsewhere. Not wait for them to calm down and get in them. The volatility usually represents the culmination of a move.

    I remember back when I daytraded in NY for Worldco as a newbie, I would run scans everyday for volatile stocks, because that is where I thought the "action" was. Then one day a guy came up to me and said why are you watching those stocks, the move already happened. Watch these. I said, those stocks look dead, why would I trade them. And his response was, because they are going to move. I asked him, how did he know that? He said, it takes practice, but that is the skill you need to develop. It's not easy, but who said trading was.
     
  356. Excellent stuff Maverick. TY for the tip.

    And yeah, I think I kinda fit that profile, I did the scan thing a bunch of different ways, and got similar results :)
     
  357. Although with futures a historically low ATR produces little results for me not sure about ACD?



     
  358. this makes sense also. thanks
     
  359. If you are a not a price action trader, the comments about volatility are not particularly applicable.

    Let me put this another way. Volatility produces noise. The more noise, the harder to read price action.
     
  360. I knew you traded, but I can see you are a competent technician, which translates to you knowing what you are doing. I know ur in my neck of the woods, so next time I am in Chicagoland I will take you up on that brewski. You follow the White Sox tho, and thats an issue, but otherwise you seem like a pretty cool guy:D
     
  361. My first trade post ACD is to take a good A down and sell Aussies and buy Yen. So far so good. I was so confident of this trade that I took the weekend spread to get in at Oanda.
     
  362. Day trading requires some decent volatility imo.


    Swing and trend trading I understand what you are saying......although risks change dramatically comparing over night positions vs. intraday.

    I read the book, some good ideas well presented
     
  363. Brewski sounds good. Just give me some advance notice to make sure I don't have a stormfront meeting that night. :)
     
  364. BTW, my monthly A down on the AUD/JPY is 80.58. It traded down to 80.45 and bounced. Successful test of that level.
     
  365. Let me clarify my comments on volatility a little more. I'm not talking about absolute volatility i.e CL is more volatile then DX. I'm talking about relative volatility. For example, AAPL has a 30 day ATR say of 7.00 and now has an ATR of 12.00. I'm saying when volatility exploded likes that, usually the move is either over or in the process of being over. I'm not saying to look for products that don't move. The tells are spotted by looking at "relative volatility" not "absolute volatility". Hope this clears that up.
     
  366. Saw that, something happened last night with all the major dollar and yen pairs. I don't know if Obama or Bernake opened their yap, or what happened. Got stopped out for a small loss. Pivot ranges saved me from a larger one.
     
  367. Okay okay, I retract the Stromfront stuff, but all is fair in love, war, and P&R :D
     
  368. Fish does mention that when Pivot ranges contract, a big move is on the way. I saw that with the usdjpy pair. Three day and one day pivot two pips apart. Oh well, hindsight.
     
  369. Yes and speaking of pivots and volatility, when you have very wide pivot ranges, trading is very difficult. Yet another reason not to "chase" volatility.
     
  370. Ok. That helps clear it up even more. Thats where I was getting confused. Relative vs absolute, I just did a poor job of explaining.
     
  371. Another way to use ACD is to watch the pivots on the higher time frames. If price is trading within the pivot ranges or on the wrong side of your daily signal then it could invalidate the trade or suggest you reduce size due the daily signal being either counter trend or consolidation. I noticed that when Mav pointed out to me an A number on a higher time frame on that AUDJPY trade. That could serve as a profit target if a bounce or a pullback from that number is seen.

    Very nice book this Logical Trader, got me to thinking about how to improve my system again.:)
     
  372. Hey Maverick,

    I typically like to look at what Joe's doing too. Since reading the Logical Trader, (and seeing his name in the dedication) I've tried to keep an ear out for some of the trades he seems to be looking at.

    Sounds like the book, (just based on the title) is something that'll be of interest to the folks in the forum. Thanks for bringing this to our attention.

    All,

    On a trading note, I'm looking at monthly A downs in lots of things so far, and this "rally" the last day or so looks a little long in the tooth, (just based on not getting any intra-day A ups yet today - granted it's early). I'm wondering if other people are looking at the same things, or if I'm grossly off-sides for September. I will say that with all the added volatility as of late I'm less sure of my levels, (seems like on any given day something could just break and scream higher/lower).

    Anyone have any thoughts on September's action so far? Or are we all waiting and seeing still?
     
  373. Try your hardest to refrain from passing judgements on the market. It's always good to erase certain words from your vocabulary that are destructive to traders. Such as bull or bear markets, over bought and over sold, etc. Also avoid things like, there is no volume on this rally, or this is just a short covering rally.

    Just focus on price! We currently have CONFIRMED weekly A ups across the board in all the indices. Do not short this market! Weekly A ups are solid signals. They are momentum trades. Also crude oil has confirmed on the weekly as well as copper. This rally is for real. As long we hold above 1174 on the week, buy the dips in the ES.
     
  374. Also, we are now back above the monthly A down in the ES. This is one of my favorite trades when the weekly A up is right above the monthly A down and we cross back above the monthly A down to confirm the weekly A up. Solid setup for a low risk trade.
     
  375. Maverick,

    As always thank you! I think I need to re-evaluate my OR for the monthly level, or take a look at my entry method/timing. I think I'm jumping the gun on some of my trades, (especially when I'm leaning against the monthly level).

    Again, thanks for your insight, much appreciated.
     
  376. Don't get caught up in precise levels. It's much much much more important that you understand "your" levels and why you chose them. My levels are not better then yours. But I understand my levels forward and backwards seven days a week and twice on Sundays. Remember, ACD is simply a lens in which to understand price action. You and I might wear different shades of sunglasses but if we walk outside and it's raining, we should both agree no?

    Too many traders focus on minute details and fail to see the forest through the trees. Just try to focus on price. Think about what is actually happening in the market with regards to price. Leave your personal opinions out of it. I always tell traders, markets are not that complicated they can only go up or down. You have two choices. Most important decisions in life have far more then two choices to make. Remember, trading is easy, very easy, when compared to real decisions you make every day that affect your family, your health or people around you.
     
  377. Very good thread and thanks for the relevant information provided.

    Just a quick question, sorry if this has already been answered.

    What is the time basis for weekly and monthly opening ranges ? 1st day of the week , of the month ? I think I saw 1st Friday somewhere in the thread ?

    I don't remember that Mark Fisher talked about higher timeframes in his book and I find this idea very interesting.
     
  378. There is no "standard" time basis. Again, I really want to emphasize something. Whenever I Google ACD to see what others are saying about it, all I get our topics where people are asking what the magic A levels are or what are the "right" opening range times. There are no NO secret A levels and there are NO right opening range times. You need to pick times and levels that make sense to YOU. Not me or anyone else. At the end of the day, you are the one that has to pull the trigger.

    I hate to disappoint everyone, but I am not an oracle. I have no secret levels or magic time frames. But I understand the logic of the numbers I use and therefore it makes sense to me and it allows me to pull the trigger.

    I wish trading were that easy. Think about it, if there were a correct level to use, one could easily back test looking for those levels and would find them relatively quickly. You can curve fit anything. Again, this is where traders get lost in the details when they should be keeping their eye on the big picture.
     
  379. I appreciate the fairness of your answer :)

    You're right, this method is flexible enough to make it your own.

    Keep up the good work.
     
  380. I get what you're saying and why you're saying it, but I think there's a bit of nuance in the idea that there are no right levels. Certainly there's a right and wrong way to approach his method.

    Fisher's trading began from the premise that the intraday opening high-low of an instrument determines its close at a statistically significant level of confidence. Care must be put into choosing the right "domicile market".

    The theory implies that you're casting a relevant net on the behavior of those traders who move the instrument, and that the net should land around when big players take their positions (relevant to your preferred holding period). You mentioned gaps and above-average volume as possible boundaries. To me, for the indices, I'm using the time between two big cyclical reports. But I'm mostly using it to support my other method, by providing a lens to intraday behavior so I can fine tune when I jump in.

    The levels can vary, and they're not "objective" in the sense that they always work for all people at all times. But it also doesn't mean that the method is completely relativistic.

    It wouldn't make sense to choose the last 47 minutes of the day as an OR in determining what the next morning's open, for example. For other commodities it makes no sense to me to arbitrarily choose, say, the first five days of every month. Why would it? Do funds or big traders change their models like clockwork based on day 1 of every month? Intraday (to me) seems to accommodate more flexible ORs; longer term seems like it requires some data analysis.

    That's why I think it's fair for people to wonder what the right levels are. "Right" implying logical -- consistent with the theory and not chosen out of a hat, while still accommodating the right volatility and holding period for the individual trader.
     
  381. Yes, of course the opening range should make sense. I'm simply referring to the difference of say using 5 minutes vs 10 minutes. I thought that was assumed. And yes, choosing the domicile market is important and that is explained thoroughly in the book.

    Please understand, I'm responding to many of these posts assuming the reader has read the book. It would be far too cumbersome if I had to actually write out all the material from the book when I'm assuming anyone who is reading this thread and would actually apply this method to their own trading would make the small investment required to purchase the book.

    All the basic ideas are discussed thoroughly in the book.
     
  382. Right on -- like I said, I know where you're coming from. This isn't about drawing H&S necklines that are visible on every chart. The book's not as precise on the long term stuff though. That's why I threw out my own thinking on Friday-Tuesday every month, hopefully just to get ideas flowing.

    I'm just thinking that for each commodity it could be fruitful for people speculate on what they think are relevant ORs, at least for longer term trading. ACD intraday seems straightforward and flexible. But I'm not about to dive into the softs or cotton without a good idea why ACD works for it -- why I'm casting my net a certain way. Just my opinion, take it with a grain of salt; I don't have the track record with this method to speak from experience.
     
  383. This is exactly why "you" need to construct the levels so you know why it should work or not. You shouldn't trust me. ACD is a canvas. You need to supply the paint and brush to create your own art. My art will look like shit to you.

    Look, I read the book just like everyone else. I didn't have a direct line to Fisher. I spent 5 years working on this stuff. Yeah, it's a lot of work and I continue to work on it day in and day out. Everyone is going to have to go through the same process. I simply took what I knew about trading and did a lot of trial and error and tried to apply whatever logic I could to put together a complete and robust methodology. There were no shortcuts. I had no reference material to read or websites to go over. In fact, most of you guys reading this thread are getting a 3 year head start on where I had to begin.
     
  384. Agreed: and right on. For those of us who've been at this for a while, I think what you've demonstrated and talked about with ACD really hits it home. Not like anything else I've seen on ET. I'm personally incredibly grateful people like you and Fisher are willing to provide a view into this.

    Trading is like that anyway: you have to make any method your own. I've never seen anyone successfully translate their own successful skill to others. You only stand behind the risk of your positions if you fully get what goes into them.

    I'm all for talking about the process I'm going through building out my own "lens" here -- that's all I'm saying. In other words, it's not a bad thing that people are trying to figure out what aspects of the method are logical for their own strategies. Some may be looking for magical levels, but I think many are just trying to understand how and when the theory has utility.
     
  385. ACD, from what I can see, is structural method. Your signals are your own. ACD is a good way to look at, and filter, some of your own signals. The method forces one to keep price action in mind at all times. It keeps one from trading indicators rather than price, which most all newbie traders do. With ACD as a template, price itself is the indicator.
     
  386. Sure, and that's solely how I'm approaching it (hence the term "lens").

    The point I'm making though, which I can't tell if it is being missed, is that there is certainly a <i>wrong</i> way to apply the theory. I think that idea is germane to any method (outside of mysticism).
     
  387. Some more meat for the grill.

    Does anyone see a possible monthly A Up in live cattle on your charting setup?

    <img src="http://finviz.com/fut_chart.ashx?t=LC&cot=057642&p=d1">

    Or cotton?

    <img src="http://finviz.com/fut_chart.ashx?t=CT&cot=033661&p=d1">

    Or is my lens broke? Just testing the waters here. Ignore this if I'm off in left field.
     
  388. Well, that just the thing, and the beauty of the method. There is no wrong way to apply it. The only wrong way to apply is if you don't do it.

    The point is that, according to your own rules, cattle makes a monthly A up. If it is a good A, so much the better. You then pan in to look for a good place to get long because you know you have price behind your back. ACD from what I can glean is meant to force a trader to trade less and not be countertrend when they do. So it is not what number cattle made a monthly A. Your number is your own. It is that price action caused cattle to meet your monthly A up.
     
  389. RCG, I'm thinking you may have read "The Logical Trader" more then once. :)
     
  390. Here is an example. Just a few minutes ago, on the daily chart I received a buy signal from the EURUSD in the form of a momentum change on my MACD. So let's verify this with ACD.

    1. Price is below the pivot range.
    2. Price has not made MY personal A up. I will have a good A up at 4197. I got the signal at 4010.

    Lemme check the weekly chart. Top of the weekly pivot range is 4341
    Top of the monthly pivot is is 4266.

    So, 4342 is the place where there will likely be more buyers than sellers and I will get long there. That is how I use ACD. That entry point is 300+ pips away for a reason. So ACD makes it much harder to get long than short in this particular environment. This slows down the pace that trade at, and makes sure that price is lined up on all the major time frames. If I take that trade and immediately get stopped out, I can watch for a C down for that calendar day.

    Best, we can discuss trade anatomy because everyone will use ACD differently.
     
  391. I have read it twice. For a veteran trader who has actually put some work into market mechanics, it is a quick and easy read.

    Newbies and some intermediates will have issues with it because they are a looking for the secret sauce. The magic number. The special time frame. All the while not realizing that the process is the secret sauce. Five years ago I would not have gotten what I needed to out of this book, and Fish is a great human being for writing it.
     
  392. RGC Trader,

    I see exactly what you're saying. Yesterday I posted that I was looking at modifying my OR. It wasn't because I thought it should be a half day versus a full day, but rather because I thought the day I might be using was less significant, (TO ME) than another time frame I'm considering.

    I'm really still testing it all out here, (only got the book about 2 months ago, and have read it about three times thus far).

    One way or the other I appreciate the contributions of everyone here and since reading ACD have been impressed with my results.
     
  393. Samsara,

    One thing to keep in mind when looking at longer-term commodity charts is the "roll effect." See those big gaps in the cattle chart? They don't really exist as that represents the difference between the expiring contract and the next contract. To get a true long-term picture, you can either chart back-adjusted data (which costs either $$ or time), or chart just the current front-month. You won't get as long a history, but you see what is actually happening with price action.

    Barchart.com has a "daily contract" setting for this.

    By the way, this is a great thread.
     
  394. I hear ya -- keep in mind I've coded the indicator in eSignal. I'm not using ACD on a barchart.com img :D
     
  395. Listen, I know you're digging the broad strokes. There are many things I disagree with in Fisher's discussion (the moving averages stuff, MAs of pivots, etc.). But the idea that there's no wrong way to use what he's discussed gets under my skin.

    As he said himself -- take his method he put forward in the book and use it on the indices and you'll lose money. Use the levels as straight-up entry signals and you'll lose money. Draw the OR on the wrong domicile market and you're just flipping coins. Plenty of ways to misapply the idea of capturing the right volatility for the right reasons.

    What I'm working on is using this stuff as a lens into my own longer term method, and that requires effort and practice. Dreamy mysticism isn't my flavor.
     
  396. Well, yes and no. There can be debate about this but at the end of the day, all technical analysis is about the presentation of data. Since all that data is historical in nature, TA simply presents that data in a readable format. I personally disagree with Fisher on some things, well a lot of things. But that is probably because we have different trading styles. I have picked up on some things that I'm sure he would disagree with but they actually work, and work quite well.

    I also disagree with the notion that he or anybody can say if you do this then you will lose money. That implies red light/green light. When I talked to him in person he said that obviously if you just get long and short at the A levels you will lose money and that I agree with. He was speaking about the intra-day signals.

    But as I've said before, this is a trend following system for the most part. Even the fade trades are and can be trend following in nature. I don't think anybody would look at a gold chart and think short or a bond chart and think short. We might disagree on where to enter and where to exit but both of us should be looking to buy gold, not sell it.

    A big part of trading futures is not getting stopped out. So it's very important for me to avoid crowded trades and taking obvious trades because those trades will have the most stops and the most whipsaw. In a perfect world you enter in areas on a trend where no one else is. This gives you that level all to yourself and minimizes the risk of getting stopped out. It's important to note what RCG said in that what is nice about ACD is you don't over trade. You don't get long, then stopped out then get long again only to get stopped out and then long yet again. It's one shot. So stop placement and entry areas need careful consideration. This is irregardless of A levels.

    What I liked about the book is that in the back where he had the trader interviews, he had 5 or 10 guys all using ACD differently. Some barely at all, others used it simply to verify their own instincts. As long as they made money and they understood the price action, that is really all that matters.
     
  397. The thing is Samsara is that there is nothing mystical about it. The way ACD is engineered you have no choice but to be on the right side of price action if you use the method. And as Mav has emphasized if the method is applied , you will not be one of those poor souls who keep shorting every pullback of a strong bull run day. That alone, nor will you be trying to trade consolidation. That alone will almost guarantee you profit. All trading is to me is hanging around till that 500 pip drop or rise, and having enuf dry powder to exploit that. ACD gives the structure to allow that to happen. Think of ACD as trading restrictor plates so you don't hit the wall and kill yourself.

    What is so mystical about that?
     
  398. I think if a person got that far in the book and was happy with it, they were able to take something very nice away from that section. A lot of traders mistake system and method. I know I did early on. ACD is a method to apply a system. If a person does not at least have a grasp of a rudimentary system, ACD will not help them. Most systems try to measure sentiment and the momentum behind that sentiment. ACD makes sure that you are in line with price action also. Put the three together, and it puts the trader in a very advantageous position.
     
  399. Okay that is great, but whatever you do, when you finish cooking the gumbo, don't add more ingredients after the gumbo is already cooked. Stay with your process of trading. Do not change time frames, do not rework math levels. Decide what you are going to do as far as triggers are concerned and then decide if price action agrees.

    Mav put on a real time bond trade, and the first thing he mentioned is a monthly A up. I think.

    Find out which way you should be trading for this cycle, and until that is invalidated, look for good places to get in, long or short.
     
  400. I agree with your whole comment. I think this particular paragraph nails why, in my opinion, this method has value over anything else I've seen on ET so far. The reason is because, as you say, you're trying to enter in a low liquidity environment where few take positions. Volatility expands, price moves to a level where more take notice, and your risk of being stopped out on the resulting churn is reduced.

    Let me try to clear up some things here. I won't go into much more detail in the future -- I'm just getting the impression I'm confusing some people in where I am raising disagreements.

    Your ability to establish a bias, and get in before a volatile move in a thin environment, rests on the premise that there is a correlation between the opening range, historical volatility, and future behavior. This all works beautifully for me because it's simple and makes perfect sense based on auction market theory.

    You and Fish point out that lots of things can be adjusted while remaining consistent with that core premise. Adjust the OR on the fly to fit relevant early activity? Using a longer OR to look at longer moves? Change your ATR variables? Enter on A or C failures at the previous pivot range? All well and good.

    The only things I disagree are anything that contradicts that premise two paragraphs above. The idea that any special snowflake can choose <i>any</i> OR is flipping a coin to me. Also, the entire concept of an OR on a longer term chart, for instance, might itself warrant discussion. I thought all of this was already baked in to the discussion -- this is what I'm trying to stimulate for my own and others' benefit.

    My primary method is medium-term trend following. I track the relative rate of change of several baskets of instruments to inform my directional bias. I exit on either a change in those baskets, on a risk stop, or on an ema in extreme vol environments. I do not look at the intraday price action of the indices I trade for signals.

    So, I'm looking to expand the instruments I trade (those baskets don't fit cotton, for instance), and also use various ACD lenses to help me leg into index positions at better times, so I can take on more size relative to my stop.

    This is my attempt to be crystal clear on where I'm coming from and why I'm trying to dig into the specifics of how and when the theory works by talking with others.
     
  401. I'll just be very brief and clear.

    I am not saying ACD is mystical. I'm saying the notion that anyone can choose any variable for the method he described and have it remain useful is mysticism.

    Please just try to resist the urge to re-describe the method and read closer into the specifics of what I am saying; it saves a lot of back and forth.
     
  402. Okay, please try to find the post where I did not describe the method verbatim as described in the book. I think your own filters are getting in the way. I think that any and all readers would agree with my assessment.
     
  403. OK, let me add something here. Years ago when I first started down the ACD road I did the free 30 day trial on Fisher's website just to get a look at his A values. I was shocked at his A values. They made no sense to me and were not even remotely close to my A values. To be honest, I have no idea how he could have made money with his A values. But that's what they were.

    Now he probably has a reason for why he chose those A values. In fact if he sat me down and explained why he chose them I might say, hmm...that makes sense. But since I have no idea how he thinks, his A values look crazy to me.
     
  404. Not trying to be rude man. I think either I'm being too wordy or your reading comprehension is completely missing something and you're disagreeing with a phantom interlocutor in your head. Maybe reread from page 66 of the thread if you want, but it's all good either way -- let's just hopefully get back to discussing the logic of the method.
     
  405. I'd be curious also. I have no idea how he trades or what his levels would look like. I know he's got a few people optimizing the ATR stuff by backtesting. For how I'm trying to approach it, the A and C levels are pretty arbitrary. It's the OR that I am trying to be really careful about -- particularly for weekly and monthly data.
     
  406. My reading skills are impeccable Samsara. You keep trying to nail down something QUANTITATIVE in a QUALITATIVE environment! One more time, the A values DO NOT MATTER. It is the PRICE ACTION that leads to the breach of YOUR A values. So you keep saying that you have an issue with the idea that the method can applied any way you want and you will be successful. I fail to grasp the difficulty in this concept. This is a METHOD and not a SYSTEM. Apply the method to your system. THERE IS NO WRONG WAY TO DO THIS.
     
  407. Try this. For weekly values, your OR is the first day of the week. For monthly the OR is the first week of the month. This ain't hard Sam:D
    You are overthinking this.
     
  408. All right, I tried. Just answer me one question:

    If there is no wrong way to do this, is it logical to use the first 3 minutes of 9/1/2011 for my monthly opening range? Why or why not?

    I'll let you respond in any way you see fit, but I honestly don't want to derail this thread any further, so this will be all from me. Looking forward to moving on from here.

    Thanks.
     
  409. It's hard to express how happy I am to find fellow traders who use Mark Fisher ACD system as part of their trading. I been looking for 9 months or so to connect with traders who use ACD system and finally landed here.

    I been trading full time for 3 years. First 2 years stocks and E-mini. Basically, went through all the learning steps, each new trader goes through. After loosing money for 2 years and spending 12k on different coaches and training material, I was at the end of the rope.

    I happen to notice Mark Fisher on CNBC 9 months ago. The moment, i saw he was youngest silver pit trader at one time , MBA from Wharton with distinction on TV screen, i was hooked.

    Got his book next day, tested for 3 months and have not looked back.

    I day trade Crude Oil futures full time. To me, Mark fisher is a genius. There is a reason his firm clears 1/3 rd of daily crude volume and Paul Tudor Jones calls him the best pit trader ever.

    I always remember the story MF shares of 2 new traders he hired some time back. One was Harvard Law Graduate , 3rd in his class. The other one - selling door to door( something which I do not remember).

    Harvard law graduate could not make it as he thought he knew what to do. The other guy said, he does not know a thing and will do exactly what MF tells him to do. Even while working at MF firm with all the training at the feet of the master, he has to bust his ass for 3 years to get his feet grounded and become a very successful trader.

    Glad to be here, and look forward to share and learn. GOD bless who ever started this thread.
     

  410. This is probably one of the best explanation of ACD system I have read in a while. Thanks Maverick.
     
  411. <iframe width="420" height="345" src="http://www.youtube.com/embed/m_wFEB4Oxlo" frameborder="0" allowfullscreen></iframe>

    Come on board. We've been expecting you.
     
  412. Hi all,

    mfbreakout joined the CL thread couple weeks ago. I had been making decent progress daytrading CL which i started about a year ago(before that i was swing trading equities). anyways, it was strange but he was making similar trades as me often times with only a few cent difference in entry/exit. He told me about the ACD method and so I read Mark Fisher's book last week and backtested a small sample over the wknd. I modified the method a little to fit my style and took the method live this week. This method has improved my trading significantly and given me confidence in each trade. I thought I had this daytrading thing down pretty good but the ACD method has brought it up to a whole new level. The funny thing is that it's so simple not rocket science. If you would like to join me and mfbreakout ,come over to the CL thread. it's been a great learning experience sharing ideas throughout the day and making decent amount of ticks.

    i do have one question for those with experience using this ACD method. have you tried making a blackbox or graybox so you can trade multiple number of stock symbols or futures? i'm daytrading CL only right now but would like to expand/branch out in the future once i get a decent track record. if you could share your experience and know a good programmer i'd appreciate your feedback. TIA.
     
  413. LOL. Thanks Maverick.
     
  414. Actually, it is. Why? You are still following the process. Follow the process. Take your three minutes and follow the rules. If you get a good A up, price is clear of the most recent daily,weekly and monthly pivot ranges that you have then take the trade. A trend starts and ends with a single price point. If it gets thru the ACD filters, then price action is in your favor. Take your trade.
     
  415. All right then, thanks for the direct response. I'm not in your camp, but bygones shall be bygones.

    In other news, anything unusual on your radar that's quietly making a move? Would you have taken an interest in yesterday's cotton or cattle setups (BAL & COW for the ETFs) based on today's price action?

    How does cocoa look to you?
     
  416. My analysis of COW would have gotten me in on the daily chart at the close today it looks like price broke the weekly pivot up at 2967. A good A up following a buy signal on my system was made at 2902 but there was a lot of selling in the past weeks and price has not sufficiently cleared the MAs that I use. There is also a negative slope to the MA i use for trend. I would take this trade on minimum position strength. Stop would be at 2889, one penny below the bottom of the pivot range on the daily chart.

    Too many gaps on the BAL daily chart, so would move up to weekly. Got a buy signal four weeks ago, good A up at 6454, but this is on heels of a tremendous down trend. Im in at 7543 and would manage this trade on a weekly chart. Full position on this one due to a positive MA slope and good clearance from short term MA's

    I will start doing scans for stuff in the mornings so we can talk about it all. I think we should start posting ACD based trades on here, so this is a good idea Samsara. We can talk ACD all day without revealing one iota about the systems we use.
     
  417. I'm currently working such on such a system for EUR/USD in Multicharts.

    Haven't found better that a break-even system for now: it's quite difficult to model the price action in the OR or following the OR to determine if you will take the A up, or fade it or wait for a C ...

    The human brain is much smarter to quickly understand the kind of market we're in (chop, wide range, strong strend, weak trend etc..) and adapt the method to the trading day.
     
  418. Let me forewarn you. Mark Fisher in his book talks about using ACD as a casino and I agree with this concept very much. What that means is that you if you SOLELY focus on just one product, you are going to end up forcing yourself to take sub par trades. You really want to trade as many products as possibly and only focus on the best trades. This is just a suggestion. I know how guys fall in love with one product or like to "get to know one product really well". But I think you will find trading much easier if you open yourself up to all markets.

    Let me also add that the Euro along with the S&P are two of the worst products to trade because they are so crowded. Stops galore. Very choppy and very messy. Also, automating ACD can be very difficult since it's a price action based methodology.

    Having said that, I'm in the process of automating an intra-day stock strategy based on ACD. More of a grey box. This only goes to show that you shouldn't trust everything I say. :)
     
  419. Thanks for the advice. I've focused on EUR/USD because I've manually traded this market for a while and found it great as a dsicretionary trader (nice breakouts and intra-day swings)

    However, it's a totally different beast when it comes to automation. I like the idea to diversify on different markets and my next run of tests will definitely be focused on a basket of futures and maybe some stocks.

    With regards to automation, I think entries are quite simple, you can only have a couple of entries every day once you've defined A and C, and I'm pretty happy with my levels.

    Therefore I think the major challenge is to design a comprehensive set of rules for exits that will adapt to the price action following the entries.

    Oh well... still few years of work, there's no rush to get rich :)
     
  420. Interesting -- it does seem you've done your homework on incorporating Fisher's thought processes into your own. Nicely done.

    Those setups look good to me, but they were chosen with arbitrary monthly ranges, which violates the theory to me. Given that, I'm only watching to just get a feel. Cocoa does likewise look interesting to me, but from the short side.

    In the coming days I might post a shot of my layout to solicit opinions and highlight some differences (I use volume profile instead of pivot ranges, for instance). Not sure if it's worth putting anything out there publicly.
     

  421. Please do post your lay out. We are trying to share and learn.
     

  422. Great points. You sound like MF through your writings. It's great to see someone who has gotten MF philosophy down cold.
    Like MF says when a patient comes to a doctors office and doctor checks pulse of the patient- if there is no pulse, regardless of how good of a doctor he/she is, nothing will happen. Doctor will simply ask " Next". Next seems to be MF favorite words for set ups , instruments etc..


    Going over my records of CL trading, i can clearly see, if i had only traded 30% of the time CL ( 30% seems to be rough average when real ACD set ups happen) my P&L would be 50% better.

    I am in the process of figuring out what else to trade ( have already ruled out all the indices, 6e) on days when CL is dead. Any ideas?

    By the way , I am so much into Mark fisher that i use MFbreakout as a screen name and had to work for 2 months to find a connection to have my copy of The logical Trader signed by the MASTER.

    He has terrible hand writing but still looks beautiful.



    Thanks,
     
  423. Discussing the concept of ACD does not require public disclosure really. For example, my levels seem arbitrary to you because you do not know how, or why, I have them. The nice thing about ACD as anyone can come along and discuss an ACD trade and reveal nothing about the system. So post away, I know I will be.

    A scan of action friday revealed no stocks or ETFs that I would mention on the thread. I took an ACD short on the Euro that is so far working out well.
     
  424. No way mfbreakout. I thought that handle was just chosen randomly! Cool stuff. LOL.

    BTW, Mark doesn't need his ego boosted that much. Have you read the book "Asylum". About 1/3 of the book is about him.

    http://www.amazon.com/Asylum-Renega...=sr_1_3?s=books&ie=UTF8&qid=1315613424&sr=1-3
     
  425. How about recommending some futures instruments to look into so that I do not have to keep trading set ups in CL everyday when there is no set up. At the present, I only trades CL futures.

    Thanks,
     
  426. ZB, GC, SI, NG, HG, KC, LE, GF, SB, CC, ZC, ZW, ZS, CT.
     
  427. A lot of people have been asking me about the 6 hours of video Fisher did at the NYMEX back in 2003.

    Here they are. He speaks fast and he does dart around a lot, but these videos are outstanding.

    http://www.4shared.com/dir/8iqeNDfz/NYSE_Symposium_2003.html

    And yes, that is Joe Terranova in the background.
     
  428. I have already been toying with this idea. I have the OR, and ATR stuff programmed into Tradestation, but need to figure out the other stuff (pivots, etc).
    Actually, its more just taking other peoples code, and figuring out what I like and dont like, and putting it together.
    It would be a grey box. I just want an alert so I can focus in on it, I dont want to bother with automation.

    I really have to reread the book, (and this thread) and see which indicators I want to use that he mentions. I am thinking about giving each of them a weight. And if a certain amount of them line up favorably for a scenario at once, I get notified through an alert. That way I can only end up focusing on ones that have a better chance of succeeding.
    I might also incorporate different time frames like you mentioned Maverick.
     
  429. So far, I only day trade Crude futures, so my comments are based of my experience trading CL, but per MF they should apply to other instruments with Volatility and Liquidity.


    Trading A up or A down only gives a trader 3% edge. Per MF adding daily pivot, daily pivot range, 3 day rolling pivot range gives a trader 8-10% edge. When daily pivot ranges or 3 day rolling pivot ranges are tight- one should expect VOLATILITY next day or two.

    One of the KEY characteristics of a strong A up or A down is that price never goes below OR high ( i use 8.30 to 9.15 eastern time as OR). One can make a week or a month on a day like that as MF wants his traders to use size and push paddle to the mettle

    Here is a chart of CL from 09-07-2011.

    http://www.screencast.com/t/n4Gchk85

    .
     
  430. I find it interesting that some traders think that sharing their system will take away their edge. I understand, why one may not want to share fruits of their HARD WORK for free and it makes perfect sense.

    Mark Fisher- is totally opposite. He being the greediest person in AMERICA ( according to him) he shares his core system with everyone. More traders become his disciple and trade his ACD , more successful his system is.

    People get hung on A value and C values- as to why he does not tell how he calculates them. He has given examples in many places as to how one can calculate. Once they calculate A values themselves, they make mockery of MF for saying that calculation of A values are proprietary to his firm. Traders say , it's so simple to calculate A value - what's so special about it or OR etc..

    One can subscribe to his daily service for $1800/year which provides excellent daily commentary, levels, all A , C values, 30 days number line etc.. but they do not want to pay.

    Traders do not want to pay for MF experience but they want to take trades against some of the sharpest minds while spending countless hours looking for answers- when answers are right there if one believes in KISS.
     

  431. By the way sharpest trading minds does not necessarily mean traders at GS, JPM etc.. Per MF most traders at these firms can not
    trade their way out of a paper bag. All they do all day long is to follow on their customers order flow.

    These guys get money from Govt. at 0% , follow customer order flow to trade and lot of people send their children to best schools all their life to get a job at these firms?

    Something is wrong here (lol).
     
  432. Yeah, for me it's the problem with the "bus people" that Fisher talks about. When too many people with the coin flipping or casino mentality start to look at the same things you do, it gets diluted.

    When Maverick's spent 5 years of his life working on his own system and says he's not going to broadcast the specifics, some might believe he's got a decent reason for it.

    Personally, I've been at this over 8 years going from prop to independent. The last 3 of which have borne consistent, solid fruit after all the volatility of doing prop full time. Now I'm mixing ACD with my own system based on correlated instruments -- integrating the two was what I was talking about. But for me I think the payoff isn't really there to actively go further with the discussion.
     
  433. What is hilarious is that I and Mav have posted everything Fish said on his first video, that some still cannot grip. ACD is a METHOD to augment a persons SYSTEM. Whatever sigs you generate, you have to verify that with ACD. If you do, pull the trigger. Price action favors you.

    Now, Mav, myself and Fish himself say it is about verifying price action. The A levels really do not matter. Get your own A levels and follow the rules.
     
  434. Sam, I think I get where you are coming from. But what you say is only possible if everyone has the same A levels. No one will. Your A level is your own A level. If price penetrates your A level, you know something is afoot.
     
  435. Fish sounds so much like W D Gann that it is not funny. What is so sad is that Gann was judged on putting Astro in his analysis, without people understanding that Gann did not have the laptops or desktops of today. He was trying to find a consistent framework in which the markets could be viewed.

    That said, Fish does provide this with ACD. It can only make whatever system you have, better.
     
  436. Congratulation on being independent and more importantly successful. I think when a trader does not share his/her system, he/she is doing other traders a BIG and REAL favor. There are several reasons for it, but for me 1 key reason is;

    1) One can not trade a system based on someone else style/thinking/input. So, it is counter productive and harmful .

    Having said that sharing general guidelines and principles is beneficial for both the giver and receiver.

    Giver- by sharing crystallizes his/her thinking and receiver hopefully does not have to spend 5 to 8 years to learn if something can be learned in 2 years.

    I been trying to help 4 other traders with ACD system for last 4 months. As MF says the day he teaches a class or one of his traders teaches a class, their trading is much better for the simple fact it is very hard for someone to teach something for 2 hours and then go on to trading and do not follow it in his/her own trading.
     
  437. Nah, it's revealing what parts of the layout look like related to my other method. If I were doing ACD by itself, yeah it's all good. But there are two puzzle pieces here. ACD's about human psychology. My own stuff's got specific data.

    Keep in mind anyone can search ET years down the road. Not saying I have anything that special or that it will even continue to pay off -- it's just something I've sweated over. After a few years after I began prop, it was a hard lesson to watch something that works begin to decay once people parse what you do algorithmically.
     
  438. Sam, markets have worked the same way since they began, you do not have anything that someone else has not already found. Not trying to stamp on what you have sweated over. Markets are simple. Start listening, and you will improve. Ditch the ego, if you can.
     
  439. Hey, congrats also on so quickly getting it right and running with it in CL.

    Here's one thing that's always on my mind.

    I still hesitate with the idea that working theories get better with popularity. When MBF is the largest clearing firm in its specialty, and when almost everyone in the pit immediately bids up his orders when he places a buy -- that makes sense. But a lot's changed since 2003, with a globalized, electronic marketplace. You gotta watch both the fly-by-night quants and the "bus people" who just flip orders and don't dig into why they're taking positions.

    Hell, the prop I used to trade at (not Swift, which was notorious for outsourcing to China) aggressively shipped out its chop shop model to China and drilled its techniques into the students there. There's a cultural norm of replicating something that works in China, by rote, without understanding the theory. There's a lot more bus people out there is all I'm saying.

    I kinda commented on this reluctance a while back in this thread.
     
  440. I've been in one of those firms and can confirm what you say is very true.

    One of the question a (senior) trader asked me when I told him I was going to trade on my own was: "but how are you going to trade without the information we have here in the bank ?"

    It really made me wonder (one more time) why these guys were paid so much to just steal a bid-ask spread from their clients :)
     
  441. I have a slightly different take on everyone looking at same A levels. Your and mine levels do not mean a thing - unless we are GS, MS , MBFCC etc..

    In fact even their levels will not mean a thing if no one looks at them.

    My belief is that MORE the MERRIER.

    Time is more important than PRICE per MF. When talking about bus people getting on the same trade at the same price, i think he was talking about TIME being more important than PRICE.

    He was not talking about his levels being so unique that only he knows about them.

    Again, I am only talking in terms of day trading as i have no experience with swing or long term trading.
     
  442. U have reading skills!

    Yes, if the market does not move after a period of time, then something is wrong and it is time to bail. I do not daytrade as I have too much energy to just sit in front of a pc all day. I swing trade all the major economies and their possible combinations. That leads to 27 pairs that I look at. What ACD has done is allow me to objectively qualify each sig that I get. I put in alerts. If the alerts are hit, then I trade. It is simple. IF IF IF one has done homework and already has a system that needs some refining.
     
  443. I had a sense that you may be talking about swing/position trading. Thanks for clarifying it. Hopefully, i will be a good student to learn from you and others to take some position trades.
     
  444. Mav, you cannot keep this up and expect me to be a worthy adversary in fight club.:D
     

  445. Thanks. Some just happens to be luckier than others - what can I say? I will not consider 3 years of trading screen time - as quickly_ but compared to 8 years it does seems to be QUICKLY.
     
  446. AMEEN Joman.

    Hope fully my wife does not read this as we have debates about this all the time.(lol)
     
  447. Thanks Maverick74.

    I watched these videos 2 weeks ago when i found the link you had posted a while back.

    Posting of these seminars and MF doing them in the first place is a perfect example of how sharing and giving can help some one like me tremendously.

    I been searching for these for some time . Every time , i will Google it, i will get to some links at Elite Trader old posting from some members talking negatively about ACD and MF. I will just turn it off and start looking again.

    Now as far as utility of these seminars - all i can say they are worth in 24K GOLD.

    Thanks again maverick 74.
     
  448. This appears to be an honest to god trading thread.

    You don't see that every day.
     
  449. Nope, you don't. It's enuf to make you bury the hatchet:)
     
  450. So there was a hatchet? :(
     
  451. Monthly A down on the spot EUR/USD for me is 140.89. Currently 135.64. Nice short on the confirmed monthly A down. Of course the US Dollar index broke out last week and confirmed a monthly A up at 75.49. Taking out the high of the QTR as well. Seems the Euro bears are going to press their bets this week on the downside.
     
  452. I just started looking into Monthly and weekly A down, A up. What method do you use to calculate A and C values , for example for CL, EUR/USD?

    At the present, I just day trade and use A value of 8 ticks and C value of 13 ticks for CL.

    A value of 10 and C value of 12.5 for eur/usd. These values are provided by MF service. They currently do not provide A and C values for weekly or monthly time frame.
     
  453. I'm on the 5th video in the NYSE seminar video series...all I can say is good stuff!

    I looked into ACD in the past and as any other newb would do, I tossed it away after glancing over a couple charts and trying to apply it. Now a year+ later, things actually make sense. The methodology helps to clearly classify price and time. If anything the way Fisher uses Macro and Micro ACD help to keep a running tally on a market.

    Obviously one has to have had some screentime to know what to look for, and after getting much more screen time in the past 6 months I see the value in it. Going forward I will definitely be working on applying these principles...I know it will take some time but it will definitely be a good investment.

    John you've packed alot of info into this thread I have alot of reading to do! LOL
     
  454. Purely figurative, Mav., purely figurative.:D
     
  455. The AUD and GBP yen pairs both triggered an A down for me at 430 my time. I was out on the town watching football, so when I got back, AUD/JPY was only 20pips away from the trigger, so I took it. Minimal position sizing.
     
  456. I think the AUD/USD is a better short then AUD/JPY. It's already confirmed a monthly A down and AUD/JPY hass not yet.

    This can be confirmed by looking at USD/JPY which is catching a bid.
     

  457. You are not alone. Per MF book, about 8,000 people took MF class, 4,000 slept through the class, out of remaining 4,000, 3000 did not had discipline to be successful. Thus in the end, out of 8,000, only 1,000 or so survived and only 500 became really successful.
     
  458. Ur correct, but the Aud/Usd train had already left the station by the time I was in a position to trade it. See, this is what is good about ACD. We are seeing the same stuff using entirely different systems.

    My A down for aud/usd was 431, when I got back to my pc, price was too far away for me to take the trade.
     
  459. Mav, it looks like Fish is big into intermarket analysis as well. What is a good way to expand on that for this thread?
     
  460. Nzd/cad - A down. Minimal position due to possible consolidation/back and fill.
     
  461. That pair is still above my QTR A up so not too excited about that short. The dollar breakout is pretty strong, I would really favor sticking with long dollar trades vs the cross rates.
     
  462. I'm sure you don't trade this pair RCG, but when there is a major crisis, this USD/HUF is a roman candle. I know the spreads are wide but when this thing goes, it goes. Confirmed A's across the board.
     
  463. I got your PM. I figure I'll just respond here. I don't really want to share my A levels or my OR levels. It's not because they are "special". I just don't want more stops around me. I have to be selfish sometimes. :)
     
  464. Added this pair. It has wave form similar to the CHF pairs. If I get a signal, I will trade it here.
     
  465. stopped out of Nzd/Cad. Two big winners and two small losers. One more great thing about following the ACD process.
     
  466. I know you've mentioned this book before - so I was at B&N yesterday and picked it up.

    Haven't been able to put it down since and am nearly done. It's really, really interesting/insane/informative. Good suggestion:cool:

    ...also it's interesting to compare the portrayals of MF in this and The Logical Trader (obviously a bit different, and you weren't kidding about the ego stroking).
     
  467. I couldn't put it down either. The NYMEX was a real zoo. What a cast of characters.
     
  468. Sounds fair.
     
  469. EURSEK A up. Confirmed at the end of the US session. If so, I will take a position. Sentiment good, consolidation number is bad. Minimum position due to possible consolidation.

    Edit, going to try ACD values based on first of the month opening ranges. Price will have to clear all major TF pivots to qualify, so the A up will come at 2157
     
  470. EUR/SEK has not confirmed yet on my monthly and is right below my QTR as well. This pair looks very choppy to me.
     
  471. Interesting, now to confirm an a A up on say a quarterly chart, do you actually wait a month and a half?
     
  472. I saw the chop as well, kinda looking forward to trying my first failed A trade:)
     
  473. RCG, when do you sleep man?
     
  474. I don't use QTR for entries. They do have a very specific purpose though.
     
  475. Wheat and Soybeans breaking down.
     
  476. Live Cattle still looking good but failed at the weekly today and yesterday.
     
  477. I guess I know now. :)
     
  478. This was a daily SPX setup today for ACD...hope you can read the PDF, dont have a scanner...
     
  479. pdf
     
  480. sorry, quality is shit...IM me if you want the excel file, my free PDF software is trash.
     
  481. Jsmooth! What's up? How is Wisconsin treating you?

    Yeah we had a nice failed intra-day A up as well as a failed weekly A up today in the ES.
     
  482. Mav, its all good! same stuff, money is all i care about....top chart was some Silver today, bottom, Gap setup plays....
     
  483. pdf
     
  484. ACD trading....Silver Today...not sure why these PDFs aint working?
     
  485. that second setup in the PDF is a Gap up/down play....
     

  486. Yup, Im down from noon till about seven or so. Best time for a trader to sleep and I have my activities set up around the markets:D
     
  487. EurSek did not confirm.

    EurCad looking good right now. What I am using ACD for is to make sure macro price action is good when I take a trade. Im going to look at the first day of the month and plot values off of that. Based on that, and my interpretation of values, anything below 3896 is a good short after a price action setup. Yesterday the bulls tried push the plummeting Euro back, they will have failed as of midnight tonight.
     
  488. Not sure I see anything with EUR/CAD. Not yet at least.
     
  489. In case anyone is interested, Gold and Silver bounced off their monthly A downs.
     
    <