Based on Mav's post #9787 in this thread where he said "I'm more of a macro trader. If I had to daytrade these markets every day I would go insane." I would say the answer to your question is a resounding yes.
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The ACD Method
- Thread starter sbrowne126
- Start date
All my trading is intermediate to long term. You still have to put in the time.
May I ask you why are you staring at the screens in real time all day long then if your time frame is long term and you could review the same price action at EOD?
May I ask you why are you staring at the screens in real time all day long then if your time frame is long term and you could review the same price action at EOD?
Markets are always moving. I'm always adjusting positions. Most of my trading is option based. Vol levels are changing, spreads are moving, etc. My core position is a long term thesis. For example, I'm very long Oil. I have option spreads across many different months and strikes. I'm always adjusting them. Taking some off, adding some more, etc. Plus there is a lot to watch. Sure, you could look at charts at night. But you will miss a lot of the nuance. For example, you might miss that one particular spread acted differently this morning when X was happening. At the end of the day you will simply see the net result, oh this spread was down on the day. But you are missing a lot of information when in fact, yes, it was down, but it did not move at all when spread XYZ was blowing out. That's valuable information. Sure you "might" catch that from the chart. I know from my own experience I tend to miss these subtle clues when I just pull up some chart at the end of the day and look at the binary outcome.
Let me give a sports analogy. I watch a lot of baseball. Take a relief pitcher for example and more specifically a closer. You could say he is a swing trader. He comes into games maybe once every 3 or 4 games. Sometime it might be a week. But he is really a daytrader. Why? Because while he is sitting over there in the bullpen, he is watching every batter, every pitch. He doesn't know if he is going to get called to come into the game. So on this particular day his team is up 10-0 in the 3rd inning. Probably not going to be a game which will offer a save opportunity. But he still watches, every batter, every pitch, every mannerism. He is watching which guys are hitting which pitches and which ones they are not. Sure enough his team blows that 10-0 lead and by the 9th inning it's 10-8. Guess what? It's now a save opportunity. He has to come into the game and close it. And he BETTER be ready. So even though he might think of himself as a swing trader, he is really a daytrader in focus. Because when he gets called, he has to be ready. He better know his hitters inside and out. He won't be able to quickly scramble and ask the pitching coach for a quick "recap" before he goes out there. And this is what trading is.
Markets are always moving. I'm always adjusting positions. Most of my trading is option based. Vol levels are changing, spreads are moving, etc. My core position is a long term thesis. For example, I'm very long Oil. I have option spreads across many different months and strikes. I'm always adjusting them. Taking some off, adding some more, etc. Plus there is a lot to watch. Sure, you could look at charts at night. But you will miss a lot of the nuance. For example, you might miss that one particular spread acted differently this morning when X was happening. At the end of the day you will simply see the net result, oh this spread was down on the day. But you are missing a lot of information when in fact, yes, it was down, but it did not move at all when spread XYZ was blowing out. That's valuable information. Sure you "might" catch that from the chart. I know from my own experience I tend to miss these subtle clues when I just pull up some chart at the end of the day and look at the binary outcome.
I see, that makes sense if you're managing your position intraday. The option stuff is way out of the league for a newbie like me. How would you recommend one to start for someone who would like to emulate your style? Is the following a valid strategy from your point of view:
If I want to go long crude oil, I'd go long if monthly A up is made, weekly A up is made (or weekly A down failed) and my entry would be at intraday A up through the pivot.
I would pair this long with a short of a weak risk asset (weak meaning has not made a monthly A up and has a weak number line).
I would exit the trade when crude oil makes a weekly A down or fails a weekly A up. Alternatively I would exit the trade if the short leg of the pair starts making monthly or weekly A ups.
I see, that makes sense if you're managing your position intraday. The option stuff is way out of the league for a newbie like me. How would you recommend one to start for someone who would like to emulate your style? Is the following a valid strategy from your point of view:
If I want to go long crude oil, I'd go long if monthly A up is made, weekly A up is made (or weekly A down failed) and my entry would be at intraday A up through the pivot.
I would pair this long with a short of a weak risk asset (weak meaning has not made a monthly A up and has a weak number line).
I would exit the trade when crude oil makes a weekly A down or fails a weekly A up. Alternatively I would exit the trade if the short leg of the pair starts making monthly or weekly A ups.
That's a good way to start. I should mention I almost always enter at failed levels. I let markets come to me. I don't chase anything. But yes, you should incorporate all the various macro time frames.
That's a good way to start. I should mention I almost always enter at failed levels. I let markets come to me. I don't chase anything. But yes, you should incorporate all the various macro time frames.
I guess that implies wide A values. Are you doing this to skew reward to risk ratio to your advantage? How do you handle those cases where the market doesn't pull back and you miss the move?
On another topic, reading the thread I noticed many posts where you say the number line may go up while the price is going down and vice versa. In Fisher's number line calculation this is not possible as the number is positive or negative only when the price settles above or below the opening range. I have a suspicion you don't care where the price settles relative to the OR. Am I right?
Hi Mav,I buy DITM calls on many trades
In this post and others, you've mentioned that you'll quite often buy DITM calls to express a long position in a stock.
Would you elaborate a bit (if it's not secret sauce) on how you select your expiration month and strike?
For example, assume your analysis indicated that being long GOOG right now (July 3, 2018) is a good idea.
Assume the monthly A levels for July 2018 are 1147 and 1151 and that the quarterly levels are 1189 and 1009. These are made totally up A levels.
How would you go about picking the DITM call strike and expiry? Thanks
I guess that implies wide A values. Are you doing this to skew reward to risk ratio to your advantage? How do you handle those cases where the market doesn't pull back and you miss the move?
On another topic, reading the thread I noticed many posts where you say the number line may go up while the price is going down and vice versa. In Fisher's number line calculation this is not possible as the number is positive or negative only when the price settles above or below the opening range. I have a suspicion you don't care where the price settles relative to the OR. Am I right?
The market always pulls back to some level, the question is how patient are you willing to be. It's not hard to get a pullback to the weekly level. But also, this is one of the reasons why I follow a lot of markets. Too many traders focus on one product and that forces their hand. They don't get the entry so they chase or they could be waiting for months. There are always new opportunities out there. We've never had more markets at our choosing as we do now. Put that to work.
Regarding the NL, yes you can have a pos score on a down stock. Take stock XYZ, it gaps down 10% on the open and goes straight up, confirms an A up and closes at the high. Stock is still down 5% on the day with a +2 score.
Hi Mav,
In this post and others, you've mentioned that you'll quite often buy DITM calls to express a long position in a stock.
Would you elaborate a bit (if it's not secret sauce) on how you select your expiration month and strike?
For example, assume your analysis indicated that being long GOOG right now (July 3, 2018) is a good idea.
Assume the monthly A levels for July 2018 are 1147 and 1151 and that the quarterly levels are 1189 and 1009. These are made totally up A levels.
How would you go about picking the DITM call strike and expiry? Thanks
No secret sauce. I only use DITM options if I'm trading something with no liquidity. The MMs will always give you a synthetic fill. Example: say stock XYZ is trading at 56.35. The options have ZERO liquidity. If you bid 6.45 for the 30 day calls, you will get filled even though they are quoted at 6.00 bid at 7.50 offer. The MM gets the easy arb for a dime and you get your fill. That is the only time I would use DITM options. If you want to go further out, say 6 months, just price the synthetic. So for example, say that same stock I want to buy the LEAP calls DITM. They will not have any liquidity. So simply price the same strike OTM puts. Let's say they are 2.00. So we take 6.35 plus 2.00 plus let's offer .10 in edge and we'll bid 8.45 for those calls. They will fill trust me.