ACD--Is it the Method to The Madness?

Quote from ajna:

Whether it's ACD or some other method, controlled disciplined risk plus market sense and bet variation is how discretionary traders make money. ACD creates the framework, but you need the latter 2 skills to make money. Just buying or fading breakouts mechanically doesn't cut it.

I think Fisher's book is fantastic. To see how a pro focuses so intensely on a fairly basic method and tweaks it to make it profitable is what trading is all about.

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"The Logical Trader" is one of the better trading books out there. Not because it provides some holy grail, but because the book lays the groundwork for the basic mechanics in trading.

I highly recommend viewing the 6 hours of live video's Fisher did at the NYMEX from 2004. That has to be one of the more entertaining lectures I have ever seen on trading.
 
Quote from eraci:

In <logic trader> chapter 1 which is freely available, Mark fisher claims that if market is following a random walk, then the morning 15 minutes has 1/26 likelihood to have seen the top (or bottom) of the day.

And then he went on to claim that it is actually much larger a proportion, thus the opening range is a much more important piece of the puzzle.

I can't help but laugh at this stupid claim. Only people who are poorly trained mathematically would believe this claim and take it at face value.

-eraci-
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when there were no pre-market trading ECN's or globex arrangements, then ort's (opening range trades) were hugely significant, along with the OOO's (opening only orders) strategy.

since the ability to offset trades or passing the book, as we used to call it (global trading from one major financial capital to another around the world) engage in trades well before the opening, then the random walk becomes a well trodden path,

opening gap theory has also fallen to these 24hour trading methods and no longer has the same impact it used to have.

this isn't to say that these methods do not still have impact, just that they are no longer as hugely significant as they once were.
 
Don't even try to say ACD isn't a good method. I personally know 2 traders that only trade it and nothing else. Everything requires a bit of tweaking. Be happy he gave out what he did. You wont see Jones doing anything like that.
 
Quote from trackstar:

Don't even try to say ACD isn't a good method. I personally know 2 traders that only trade it and nothing else. Everything requires a bit of tweaking. Be happy he gave out what he did. You wont see Jones doing anything like that.
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the method is outstanding,,,

the website and the data from there is above top notch,

I was at the presentation of the book, and read it.

Mark really does walk on water, you should have seen it...

I know a number of guys at the NYMEX that swear by it also,

but that does not disparage the reality that the opening, given the globex and NASD ability to pre-market trade listed stocks (just to cover both main marketplaces) have limited the impact upon the opening order / trading strategies.

these used to be the exclusive domain of the professional trading IB's and few others,

now, one can trade virtually around the clock. I worked with studies regarding the opening gap theory, and its been widely accepted, these conclusions too...

so, how did that disparage this trading method?
 
Quote from limitdown:

when there were no pre-market trading ECN's or globex arrangements, then ort's (opening range trades) were hugely significant, along with the OOO's (opening only orders) strategy.

since the ability to offset trades or passing the book, as we used to call it (global trading from one major financial capital to another around the world) engage in trades well before the opening, then the random walk becomes a well trodden path,

opening gap theory has also fallen to these 24hour trading methods and no longer has the same impact it used to have.

this isn't to say that these methods do not still have impact, just that they are no longer as hugely significant as they once were.
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Let me offer a counter argument. True, you can trade around the clock now, but that still does not change the fact that a significant amount of liquidty still trades withing the OR. Sure spoos trade all night, but no where near the liquidity you see between 8:30 and 9:00 central time. Same goes for stocks. The other issue you are missing is options. Options do not trade around the clock. And a good majority of paper flows through the first 20 minutes of RTH. This has a significant impact on the OR.

And also, Fisher has had a lot of success trading currencies, and they trade around the clock obviously. He uses the home country for the OR. The levels work great, even though in theory, the markets never really close during the week.

Let me also add that I have found that ACD levels work great on the index futures using the European hours as the OR time. I have found that the OR and the A levels are also significant during US RTH.
 
Everyone I know who trades the opening range system like Fisher's has read the book and taken the core principles and ideas and tweaked them to their own research and liking to develop something they can use consistently and profitably.

It has been said here before but I do not think you can blindly take hte exact parameters from the book and trade it as is to make money especially since Fisher himself has admitted to leaving out key detail in how he defines the range and how far above and below to set up his lines and such.

But those I spoke with have adapted his principles to their own trading style/system and seem to be doing well and I have adopted many nuggets as well.

I think the problem is that as a result of the detail in the book most people assume the full system is truly laid out. So as written I do not think you can trade the ACD method from the book literally but if you study it and look at the markets you are interested in (indexes, forex, grains, etc) I think you can apply the principles and develop a good trading system/approach.
 
optioncoach is on point.

Mark's method is really a great way to be in a market on a big trending day or a big reversal day, which hopefully far exceeds thr small loses from the choppy days.

That's it in a nutshell.

Most traders who don't succeed at trading have never grasped the concept (or their bran cannot accept) of a multitude of small loses and sporadic large wins.

In life, you would be fired for making "losing" decisions 4 out of 5 times. In trading, it's how you can make millions.

I don't want a cardiac surgeon who is only correct 20-25% of the time, but I love it when my 1 winner swamps my 4 losers by a 10 to 1 margin.
 
Objective entries for bulls are 1) support 2) double bottoms 3) breakouts from consolidations, and 4) uptrend lines. If you buy anything other than those spots, you are leaving yourself open to high risk.

Now, I'm buying as close to support as possible and shorting as close to resistance as possible.This keeps my losses to a MINIMUM, but I do get stopped out a bit more. Until ample consolidation in the markets occurs, I'm going to continue to trade this way. When the consolidation comes, I will buy and hold breakouts all day long.
 
Quote from margo_trader:

Objective entries for bulls are 1) support 2) double bottoms 3) breakouts from consolidations, and 4) uptrend lines. If you buy anything other than those spots, you are leaving yourself open to high risk.

Now, I'm buying as close to support as possible and shorting as close to resistance as possible.This keeps my losses to a MINIMUM, but I do get stopped out a bit more. Until ample consolidation in the markets occurs, I'm going to continue to trade this way. When the consolidation comes, I will buy and hold breakouts all day long.

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Not only does your post have nothing to do with the subject, it is spam for your blog.
 
Quote from DonKee:

...Most traders who don't succeed at trading have never grasped the concept (or their bran cannot accept) of a multitude of small loses and sporadic large wins.

In life, you would be fired for making "losing" decisions 4 out of 5 times. In trading, it's how you can make millions.
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That may well be, but the downside of such an approach is that you will incur a considerably larger drawdown before you realize that something may have become amiss with your trading for one reason or another. Further, consider a business with a few key clients. While each such client may contribute meaningfully to the company's bottom line, the loss of any such client would have a significantly negative impact on overall performance. The company with a wider customer base is more likely to better weather a storm. And there is always a storm. Similarly in trading, although an aggressive approach seeking large wins at the expense of numerous small losses may yield the highest net profit (although perhaps not at the best risk adjusted return), there is something to be said for reliability and consistency. Perhaps this sentiment will prevent me from amassing those millions. I can live with that.
 
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