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The ACD Method
- Thread starter sbrowne126
- Start date
Is this the ugliest you guys have ever seen ES trade?
Yeah I've seen much uglier action as well. Markets act like this in transition. The beauty of ACD is it really telegraphed this pretty well. I have a negative number lines that are all messy and showing chop. It's telling you to stay away from indices. And the ones that are confirmed have been the least messy although Bonds yesterday were an exception. But the long Bond, short oil, long USD/MXN and long USD/CAD have been pretty smooth trades. It's quite remarkable how the number lines can sort that out. Remember, some of the best trades you will ever make are doing nothing. Sitting out the chop. Before I use to score number lines every day I traded everything that moved. Hell there is always a level somewhere. But this leads to attrition in your account slowly bleeding away your capital. Believe it or not, this price action use to be the norm before the world of QE. It looks like the FED is slowly backing away from the table.
I have to warn some of you. There have some good warnings out there about how very few traders in the market have traded in a rising rate environment. It's VERY different. I will repeat their warning here. The markets will behave very differently. I know the next question will be, but Mav, bonds are rallying. Yes, the long end of the curve will stay under pressure. The FED always controls the short end of the market. So that means we could see an inverted yield curve. This is where years of screen time really start to pay dividends. The new guys are not going to know what hit them.
prime example of what Fisher was talking about is taking place today. Where is the real action in energies? crude spreads. z/z +58, front month is flat. really, v crude only seems to be moving to compensate for heating oil via the cracks.
Mav, I guess I would be considered "new", and I've never traded equities or related index, have only been doing this since 2006, and first 4 years had physicals involved, so I don't remember trading in a straight up rising rate enviro. Care to elaborate on the change, specific to ACD? I would imagine its just similar to how the grains were prior to 2008...pretty slow, grinding movement...
Mav, I guess I would be considered "new", and I've never traded equities or related index, have only been doing this since 2006, and first 4 years had physicals involved, so I don't remember trading in a straight up rising rate enviro. Care to elaborate on the change, specific to ACD? I would imagine its just similar to how the grains were prior to 2008...pretty slow, grinding movement...
yeah, front month with confirmed weekly Adown while z/z, front spread and the arb are all ripping
Yeah +16 on my WTI front spread and it's been confirmed for a long time. Slow moving but pretty smooth.
I'm -24, but my time spread confirmed positive last week. And we've seen some strength there relative to the flat price.
here it was.
blew right through my monthly Adown, unfortunately though
Yeah I've seen much uglier action as well. Markets act like this in transition. The beauty of ACD is it really telegraphed this pretty well. I have a negative number lines that are all messy and showing chop. It's telling you to stay away from indices. And the ones that are confirmed have been the least messy although Bonds yesterday were an exception. But the long Bond, short oil, long USD/MXN and long USD/CAD have been pretty smooth trades. It's quite remarkable how the number lines can sort that out. Remember, some of the best trades you will ever make are doing nothing. Sitting out the chop. Before I use to score number lines every day I traded everything that moved. Hell there is always a level somewhere. But this leads to attrition in your account slowly bleeding away your capital. Believe it or not, this price action use to be the norm before the world of QE. It looks like the FED is slowly backing away from the table.
I have to warn some of you. There have some good warnings out there about how very few traders in the market have traded in a rising rate environment. It's VERY different. I will repeat their warning here. The markets will behave very differently. I know the next question will be, but Mav, bonds are rallying. Yes, the long end of the curve will stay under pressure. The FED always controls the short end of the market. So that means we could see an inverted yield curve. This is where years of screen time really start to pay dividends. The new guys are not going to know what hit them.
try to remind folks to reduce size/contracts when vol goes up, long bonds has been a good trade in the last few months. I think the bonds are tough sledding. There was a guy on one of the other threads here claiming he could could take full point out the bonds every day. I will let you do the math on that. China is spooky, it caused a big sell off in August a few years ago, but this move is not a big shock at the moment. Dow 36,000!!!
https://en.wikipedia.org/wiki/List_of_largest_daily_changes_in_the_Dow_Jones_Industrial_Average