CL Redux

Hi MFB, nice trading today -- I had to leave early (as I do every Tuesday, around noon to 1pm) , and missed the nice move up near the close.

I did a little searching on ACD, and found this quotation:
Keep in mind that, although we used the S&P 500 Index in the above example, Fisher did say in a telephone interview that it does not work particularly well and that he believes there are far better candidates to trade with the ACD. It is also important to note that it does not work very well on low volatility equities stuck in a trading range.

Read more: http://www.investopedia.com/articles/technical/04/032404.asp#ixzz1XDBD2lgH
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So with how you use the method, is it very mechanical? The trades you take seem to be quite based on market action, and are some of the same trades I either take, or in today's case, should have taken when I saw them. It seems like with the rules I read in that article (which I'm sure are only a small sample of the whole thing), that it would be easy to back test mechanically to get a picture of max drawdown. The fact that Fisher says it does not work very well with the S&P concerns me--not because I care about the S&P, but because at times all markets can change and evolve, and my biggest fear is to be successful with a trading system that's very rule-based for a year or two, and then have my world turned upside down because it stops working. Hence, I'm quite discretionary, and while I'm having good success now, I'm always on the lookout for methods which can help me.
 
Quote from JoshDance:

Hi MFB, nice trading today -- I had to leave early (as I do every Tuesday, around noon to 1pm) , and missed the nice move up near the close.

I did a little searching on ACD, and found this quotation:


So with how you use the method, is it very mechanical? The trades you take seem to be quite based on market action, and are some of the same trades I either take, or in today's case, should have taken when I saw them. It seems like with the rules I read in that article (which I'm sure are only a small sample of the whole thing), that it would be easy to back test mechanically to get a picture of max drawdown. The fact that Fisher says it does not work very well with the S&P concerns me--not because I care about the S&P, but because at times all markets can change and evolve, and my biggest fear is to be successful with a trading system that's very rule-based for a year or two, and then have my world turned upside down because it stops working. Hence, I'm quite discretionary, and while I'm having good success now, I'm always on the lookout for methods which can help me.
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Mark Fisher has been using this system for 30 years. About 75 prop. traders use this every day at his firm. Mark Fisher is no ordinary trader. In fact , he is the best and most successful pit trader.

S&P or any other instrument- which does not have VOLATILITY is not suitable for this system. There are days when CL does not have VOLATILITY and traders try to use ACD system and it does not help. Days, when S&P has volatility, it works like a charm.

Mark Fisher system works on any instrument e,g Bonds, corn, Forex etc.. My main goal ( as all of mark Fisher do) is to trade an instrument which has volatility on the day i am trading be it cl, gc, si or euro etc..

It is useless to trade an instrument when it does not have volatility. My recommendation will be to get his book " the logical trader". This is not a mechanical system. Context is important. When one can combine context with reference points ACD system provides, it is MAGIC.


Most importantly, one does not have to give up his/her current trading method. ACD is used in conjunction with other system. For me, personally ACD is the main system with market profile for context etc..
 
MF

Do you have any insight into how to calc A levels? I assume it's something you have to get a feel for by watching the market. Not asking you to divulge what you use (it will likely be different for each person depending on their own preferences anyway) but any insight would be nice. Thanks.

From what I've read about ACD it's not a red light green light trading system, but more like a framework to guide your trading decisions and bias.

The neat thing about it is you can apply the opening range to any time of day you want, or on any timeframe, as long as their is volatility. I was reading the blog of a guy who does it on daily charts. His OR is the first two days of the month, and therefore a breakout must hold for 1 day, etc
 
The following highlighted areas are the buy points if you're looking to be long. Aggressive is black (8600), followed by more conservative levels on the way down.
 

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My general 2 cents on the above discussion: i believe you have to choose your market and time frame to "fit" your method. For example, if your method is trend following, don't use it on markets that don't historically trend! They are not going to magically start trending just because you start trading them. A method based on volatility works on volatile markets and time frames., not on markets that don't do anything.

I've read some of the Mark Fisher method in the past - i admit i found it a little heavy going. I'll have to research it again, sounds v interesting.
 
Quote from dv4632:

MF

Do you have any insight into how to calc A levels? I assume it's something you have to get a feel for by watching the market. Not asking you to divulge what you use (it will likely be different for each person depending on their own preferences anyway) but any insight would be nice. Thanks.

From what I've read about ACD it's not a red light green light trading system, but more like a framework to guide your trading decisions and bias.

The neat thing about it is you can apply the opening range to any time of day you want, or on any timeframe, as long as their is volatility. I was reading the blog of a guy who does it on daily charts. His OR is the first two days of the month, and therefore a breakout must hold for 1 day, etc
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There are no trading secrets in trading. I have only found that traders who really do not know much about trading tend to think that keeping their so called "SECRET FORMULA" will give them an edge.

In fact, it is totally opposite. Mark Fisher himself always points out the reason he wrote the book and train new traders is for selfish reasons. More traders know about his system and use it, more powerful it becomes. There is reason his firm clears 1/3 of daily crude oil volume.

A , B, and C values are calculated based off ATR and volatility. I subscribe to his service and just get values off the service. I do not trade stocks, so it is much easier. I trade futures and these values have not changed in a year. For example CL A = 8 ticks, C =13 ticks, /es A value= 3.5 C = .5, /gc= 3 and C=2 etc..

If you need values for a particular instrument, let me know. Mark Fisher also uses first 2 days of the month to get a sense of the range for entire 6 months etc..

Post name of the blog, i always like to read about ACD system.
 
If we break up with conviction above the 87.50 area, the upside target is IMO clearly 88.80 to 89.00 -- nothing I see that will stop it before that.
 
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