Copper down 6%. Bonds traded up to 145'15.
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The ACD Method
- Thread starter sbrowne126
- Start date
Quote from Maverick74:
You can use monthly pivots, the number line, etc. I'm not a fundamental guy so I don't want to act like I know anything about live cattle because I don't. But there are some people in this industry that think this product could go parabolic due to all the cattle being slaughtered right now due to the drought in TX.
From a technical perspective, this market looks nice. It has not gotten to a point where you look at the chart and say, I don't want to chase it. Just watch the price action. BTW, there is an ETF, of course called COW.
Just a note regarding the ETF: COW is a portfolio of live cattle and lean hogs, so it wouldn't be a pure LC trade. However, current weight of LC is ~63% vs. only ~37% for LH anyway
http://www.ipathetn.com/COW-overview.jsp
Quote from Maverick74:
You want to be a little careful with this. A lot of this depends on what type of trader you are. Are you a breakout trader or a fader. I would exercise some caution in using similar opening ranges for crude oil and ES for example. One is a momentum product, the other is a mean reversion product.
Also, the intra-day time scale is very unique and does not translate well to larger time frames. Just try to think about the product you are trading and try to ask yourself what are you asking ACD to show you about that product.
Hey Maverick,
Your comments here have me a little worried. I'm fairly new to ACD, and use it mostly to trade individual stocks in more of a breakout fashion. Where do you think my application might need some re-consideration?
I'm grateful for any input you might have, or any thoughts you might want to share.
Thanks in advance
Quote from flip:
Just a note regarding the ETF: COW is a portfolio of live cattle and lean hogs, so it wouldn't be a pure LC trade. However, current weight of LC is ~63% vs. only ~37% for LH anyway
http://www.ipathetn.com/COW-overview.jsp
Yeah I know. Many of these ETF's are blends of futures contracts or even basket's of related equities. For those that are averse to trading futures, this is the only alternative they really have.
Maverick, do you also follow the VIX future (VX) for your ACD trading?
In terms of it's price action and behavior it might be a very interesting asset for this kind of trading.
(I've only recently started to look into ACD in more detail, realizing that it will be difficult to add it to our automated short term futures trading - which is something that you also mentioned in this thread, although you seem to try to go this route too.)
In terms of it's price action and behavior it might be a very interesting asset for this kind of trading.
(I've only recently started to look into ACD in more detail, realizing that it will be difficult to add it to our automated short term futures trading - which is something that you also mentioned in this thread, although you seem to try to go this route too.)
Quote from Maverick74:
You want to be a little careful with this. A lot of this depends on what type of trader you are. Are you a breakout trader or a fader. I would exercise some caution in using similar opening ranges for crude oil and ES for example. One is a momentum product, the other is a mean reversion product.
Also, the intra-day time scale is very unique and does not translate well to larger time frames. Just try to think about the product you are trading and try to ask yourself what are you asking ACD to show you about that product.
I also, Along with Quon am kinda curious about this. (The momentum vs mean reversion part.)
Can you elaborate on what can be used to differentiate the 2, from a day traders perspective? (FWIW, Thats kinda why I posted those 2 radarscreens from awhile back on intraday behavior. (scanning for frequent large candle days on one hand, and stocks that move, but often retrace towards open ). But maybe I was barking up the wrong tree, and not looking at the bigger picture)
I am not sure if this is getting into your secret stuff, so if it isnt, can you explain?
Quote from Quon:
Hey Maverick,
Your comments here have me a little worried. I'm fairly new to ACD, and use it mostly to trade individual stocks in more of a breakout fashion. Where do you think my application might need some re-consideration?
I'm grateful for any input you might have, or any thoughts you might want to share.
Thanks in advance
If you daytrade stocks then there should be no issues. I'm speaking about when you mix and match time frames and use the same variables. You just need to be very careful. There is very little correlation to intra-day movements and larger macro movements. They are different animals.
Quote from mdl060374:
I also, Along with Quon am kinda curious about this. (The momentum vs mean reversion part.)
Can you elaborate on what can be used to differentiate the 2, from a day traders perspective? (FWIW, Thats kinda why I posted those 2 radarscreens from awhile back on intraday behavior. (scanning for frequent large candle days on one hand, and stocks that move, but often retrace towards open ). But maybe I was barking up the wrong tree, and not looking at the bigger picture)
I am not sure if this is getting into your secret stuff, so if it isnt, can you explain?
I think what you need to do is take into consideration what type of trader you are. If you are trading momentum, you want to use tighter opening ranges and smaller A values. Some guys actually use 3 min opening ranges to trade crude oil for example. If you are a mean reversion trader, you sure as hell don't want to sell tight range bound markets, you want wider ranges so wider opening ranges and larger A values.
Then you have to consider the product you are trading. Bonds don't trade the same way as crude oil. Some of these products gap more then others. Bonds for example gap on economic data at 7:30 central time. Oil gaps on the inventory numbers. Grains gap on crop reports. You can't trade corn the same way you trade AAPL. I mean I think this is common sense.
Here is my advice. Before you start getting into too much of the macro stuff, try to master intra-day ACD. It's easier since you are focusing on one time frame. Once you get into the macro stuff you need to watch the daily, weekly, monthly, QTR, etc and that can drive one nuts if you are unsure of what you are doing.
The Logical Trader book focuses on intra-day trading using A levels and daily pivot ranges. That is a great way to get started.
Quote from flip:
Maverick, do you also follow the VIX future (VX) for your ACD trading?
In terms of it's price action and behavior it might be a very interesting asset for this kind of trading.
(I've only recently started to look into ACD in more detail, realizing that it will be difficult to add it to our automated short term futures trading - which is something that you also mentioned in this thread, although you seem to try to go this route too.)
You can trade the VIX as a proxy for the ES. I would not chart the ACD levels on the VIX but you certainly could try to get some extra edge by buyijng the VIX for example at a failed A up when vol is cheap and vice versa.
Quote from Maverick74:
If you daytrade stocks then there should be no issues. I'm speaking about when you mix and match time frames and use the same variables. You just need to be very careful. There is very little correlation to intra-day movements and larger macro movements. They are different animals.
Gotcha,
Your comment was more in reference to not using the same data for very different products. Completely understood and agree, (and not using say a daily a up signal for getting long macro when you have a monthly a down).
Whew, I thought it was back to the drawing board there for a minute!
Thanks a ton for the reply.