01-27-2012 trades. only 2 trades on Friday.
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Day Trading Crude without indicators.
- Thread starter mfbreakout
- Start date
01-27-2012 trades. only 2 trades on Friday.
Following is an example , how Mr. Steidlmayer expanded my ACD.
" Once the market completes its growth phase and becomes static, a third stage occurs which makes the market most efficient. A price that best serves all participants is located and utilized. Essentially, the market is heavily influenced by the first two stages, while the third stage exerts a latent influence through time. Price handicaps the market in the same way weight handicaps a racehorse- ultimately, both are slowed as a result.
In terms of distribution, market movement would be contained by a CENTRAL PRICE where distribution and development are proportionally related to the static range of the distribution".
I used to read paragraphs like above again and again but could not get a handle on my LOVE- CL (lol). And finally, I read Mark Fisher and CL being down $8 in 3 days and then up $12 in next 6 days started to make sense and how to EXECUTE it.
Once, I got through initial phase of ACD success, there were days when i needed more than ACD. That's when my earlier readings of market profile, Mr. Vic Sperandeo, Market Wizards books etc.. started to help.
Point being, if i have to do it again, I will first read a book which helps with EXECUTION ( for me it is MF book) and then read all the other wonderful books.
I started with Market Wizard and about 100 other wonderful books but all of them had little to show in terms of EXECUTION. At first stage of my development I needed a book from a master trader like Mark Fisher.
Note: I do not want to start a discussion as to which book is better etc.. Just sharing my thoughts for new traders.
" Once the market completes its growth phase and becomes static, a third stage occurs which makes the market most efficient. A price that best serves all participants is located and utilized. Essentially, the market is heavily influenced by the first two stages, while the third stage exerts a latent influence through time. Price handicaps the market in the same way weight handicaps a racehorse- ultimately, both are slowed as a result.
In terms of distribution, market movement would be contained by a CENTRAL PRICE where distribution and development are proportionally related to the static range of the distribution".
I used to read paragraphs like above again and again but could not get a handle on my LOVE- CL (lol). And finally, I read Mark Fisher and CL being down $8 in 3 days and then up $12 in next 6 days started to make sense and how to EXECUTE it.
Once, I got through initial phase of ACD success, there were days when i needed more than ACD. That's when my earlier readings of market profile, Mr. Vic Sperandeo, Market Wizards books etc.. started to help.
Point being, if i have to do it again, I will first read a book which helps with EXECUTION ( for me it is MF book) and then read all the other wonderful books.
I started with Market Wizard and about 100 other wonderful books but all of them had little to show in terms of EXECUTION. At first stage of my development I needed a book from a master trader like Mark Fisher.
Note: I do not want to start a discussion as to which book is better etc.. Just sharing my thoughts for new traders.
I am copying this from Maverick74 as he has explained some of finer points of ACD very nicely.
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.
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.
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.
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.
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.
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.
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.
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.
Quote from mfbreakout:
12-28-2011. When all the STARS line up. A day to remember in terms of opportunity and potential.
market Internals along with DXY making A up- gave clear signals to hold on to trades. Hopefully no one was trying longs on 12-28-2011
Attachments
One way to look at ACD per maverick74.
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.
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.
Quote from monti1a:
Hi MFB, what's your take on using ACD to trade the ES?
thanks in advance
In my limited experience there is only one way to trade ES. ES provides more failed A up or failed A down than any other instrument.
Using Mark Fisher pure breakout setup for trading ES is a loosing proposition at best.
Trading ES for 2-3 points is a loosing proposition. Looking at market internals etc.. to execute a trade is not much of a help. One need to be aware of one KEY THING- is the day going to be a RISK ON day vs RISK OFF day? One need to be aware of MACRO themes.
Mark Fisher recommended OR for ES is 9.30 to 9.50 am eastern time. To have a confirmed A up or A down, one need to add 3.5 points to OR high and subtract 3.5 points to OR low.
After that one has to wait for 1/2 the time of OR for confirmation. That will be 10 minutes for ES ( 1/2 of 20 minutes).
Let me share a statistic with you. In the month of January 2012, the easiest trade has been to take a failed A down, put stop loss and do not do anything till price hits OR or higher to book profit. In 90% of the cases only one trade was needed in January, 2012.
Traders trying anything in between had little chance. Take a look at charts for entire month of January and it is just amazing. Either failed A up or A down.
It amazes me that we all kind of BS in the market trying to sell us in terms of education. Whereas Mark Fisher who besides himself being one of the biggest and most successful trader ( to this day he trades) he has or had some of the biggest traders working for him and he shared his method in a book.
May GOD bless Mark Fisher and Jim Dalton all i can say.
WARNING: Mark Fisher method is not a trading system . It's a method and not for everyone. Similarly, Market Profile is not a system. It's just another way to look at data.