The ACD Method

Man, Vol has really got crushed this past month. I know it is a seasonally weak period for volatility, but looking at this chart really sheds some light on this.

That 25 level is pretty important, a monthly close below there and we could possibly get a lift for a while. Looking back in the past this seems to hold true...close below 25 and vol seems to stay subdued for a while!

Equities are contracting in volume and volatility...That good ol wedge type pattern. Me thinks we could get an explosive move and maybe higher ....hmmmm.

AAPL above 400 soon? What do you think King :)
 

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Quote from mfbreakout:

Till I find a better way to trade like you suggested spreads, calendars, I prefer an instrument which moves 250 ticks every day, has VOLATILITY and LIQUIDITY. And of course leverage is nice.

I do not consider 100 ticks days to be a scalp. Maverick74 has been trading for 15 years, I only 3 years. Based on my experience and expertise, CL is all i can handle.

But I appreciate showing us the way of other possibilities like spreads, calendars etc..

I am following your advice that ACD is like playing tennis, the more one practice the better one gets at it.

I do realize that I have been so focused on CL that I feel like i can not trade anything else. I know price behavior of CL which is way beyond ACD. It took me , 4000 hours to get CL under control and I feel like where would i get another 4,000 hours to get handle on another product.

In short due to my focus on CL exclusively, I have boxed myself. As my capital grows, I will need to get out of this box.
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Do you trade Crude outside of the intraday time frame? Its right back at that 100 level...seems to want to hold higher. Any opinion??

Seasonal strength doesn't look to come in till around February in Crude tho...so we might have to wait. I'm a believer in Commodity super cycle theory so I think long term we are up!
 
Quote from mfbreakout:

Till I find a better way to trade like you suggested spreads, calendars, I prefer an instrument which moves 250 ticks every day, has VOLATILITY and LIQUIDITY. And of course leverage is nice.

I do not consider 100 ticks days to be a scalp. Maverick74 has been trading for 15 years, I only 3 years. Based on my experience and expertise, CL is all i can handle.

But I appreciate showing us the way of other possibilities like spreads, calendars etc..

I am following your advice that ACD is like playing tennis, the more one practice the better one gets at it.

I do realize that I have been so focused on CL that I feel like i can not trade anything else. I know price behavior of CL which is way beyond ACD. It took me , 4000 hours to get CL under control and I feel like where would i get another 4,000 hours to get handle on another product.

In short due to my focus on CL exclusively, I have boxed myself. As my capital grows, I will need to get out of this box.
More...

So would you trade USO? It replicates crude tick for tick.

I'm just trying to point out that every product provides the same amount of tradeable opportunities. The two main considerations for most traders these days are leverage and liquidity. This is why the 3X ETF's are so popular. If you remove the leverage factor, there really is nothing all that special about crude oil. In fact, in % terms, it's pretty tame compared to most 3X ETF's and many stocks.
 
Quote from Shanb:

Do you trade Crude outside of the intraday time frame? Its right back at that 100 level...seems to want to hold higher. Any opinion??

Seasonal strength doesn't look to come in till around February in Crude tho...so we might have to wait. I'm a believer in Commodity super cycle theory so I think long term we are up!
More...

I do not trade outside intraday. Since, I came back from vacation 2 weeks ago, CL has been down about $9 and almost up that much. $18 in 2 weeks, is what day traders live for. CL has provided movements like these all year long.

When one gets so much focused on PRICE ACTION ( lot of traders dream about being Price Action traders- but they really are not), I do not see any reason to swing trade CL.

Looks like CL will be my day trading instrument for a while. When other futures like GC, or Forex etc.. are at key levels with major macro headwinds as backdrop, then I will try to swing trade them.
Like GC failed monthly A up month or so @1800. Next 7 days from $1800 sell off is all one needed. After that GC has become a day trading instrument and for that I have CL. Cotton falls into same category with other futures contract like copper etc..

I do not have another 4,000 hours to get a handle on another future contract to day trade. But that experience has given some perspective to swing trade other futures contracts at key levels and moments.

Commodity Super Cycle is a fact. One needs to be an investor Like Jim Rogers to take advantage of that.
 
Quote from mfbreakout:

www.tradeflight.com. One can go to this site and look at which products gives a trader biggest BANG for his buck. I switched to CL a year ago after looking at the numbers.

Gold, Cl and Russell are the top three.

Disclaimer: Author of the study is a friend of mine and a MASTER trader.
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Thanks for the link. Definitely worth exploring!
 
Quote from mfbreakout:

www.tradeflight.com. One can go to this site and look at which products gives a trader biggest BANG for his buck. I switched to CL a year ago after looking at the numbers.

Gold, Cl and Russell are the top three.

Disclaimer: Author of the study is a friend of mine and a MASTER trader.
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I'm not quite sure whether margin is the proper denominator when evaluating stuff like that, as with futures the margin typically isn't (or shouldn't be) the limiting factor anyway.
Further he uses ATR which includes overnight gaps, but for pure intraday trading, only the intraday range and not the overnight gaps are of interest.
 
Quote from Maverick74:

I would warn guys about trading the products that give one the most "bang" for their buck. I have talked about this on here relentlessly about avoiding crowded trades. The heavier the traffic, the harder it is to trade because the noise level is unbearable. This includes stuff like the CL, the Euro, ES, AAPL, FAS and FAZ, etc. And certainly Gold.

I made a very very nice living trading listed stocks that no one on this thread has even heard of. Sitting there all by myself with the specialist catching smooth moves. Newbie traders will never make money trading noisy products no matter how much bang for the buck you are getting. And professionals know better.

Just my opinion of course. I'm often wrong.
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Thanks, Very interesting way to look at things! I primarily trade FX (Euro, AUD, JPY and CHF) and ES. All noisy and widely followed.

Will you please list some futures/stocks that you will classify in the 'unheard of' category. I will start following them for few weeks/months to see how I can incorporate them also within my trading.
 
Quote from Maverick74:


I've been trading for about 15 years. And I'll tell everyone this, if you want to stay in this game for the long term, you need to find a way to reduce the noise and lower the stress. Over time, the noise and stress become unbearable.
....
Again, just my words of wisdom here. Not trying to tell anyone they are right or wrong in how they trade. I've been in this game for awhile and I saw 98% of the guys in my prop group blow out. I know this game. I know the rules. I see what happens. Just sharing my experience.
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Mav, many thanks for sharing this post. I am going to make a copy and file it. It will really help me evolve as a trader.

Btw, are you serious that 98% of prop traders in your group blew up overtime? That means number must be greater than 95% for the retail public. I mean just 2% success rate for prop guys is a very difficult benchmark. What is the reason - because they did not understand risk, did not cut 'that one' position which kept going against them and blew up or, their trading always remained like newbies - very volatile pnl from day to day ?

Thanks if you can take some time to pen down a detailed response to the above paragraph. Lots of lessons can be learnt by hearing the behavior that leads to blowup of pro prop. traders.

P.S.: Just trying to understand, I am still a newbie and have blown up multiple times. So, that makes this query even more relevant for me.
 
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