You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
The ACD Method
- Thread starter sbrowne126
- Start date
Quote from Maverick74:
Only speaking about the intra-day levels today. DX failed at the A up. Had a few wicks above it but failed. My level is 79.77.
I am a ONE TRICK PONY TRADER. CL A up.
http://www.screencast.com/t/lsYSubXik0Ov
Quote from mfbreakout:
I am a ONE TRICK PONY TRADER. CL A up.
http://www.screencast.com/t/lsYSubXik0Ov
Quote from mfbreakout:
price breaking below A up level 78.33 also provides shorting opportunities- I did not take any shorts after A up confirmation but shorts were there.
http://www.screencast.com/t/Syv8KFk5SJ
ES trading below my weekly A down but has not confirmed yet. Crude failed at my weekly A up. Bonds confirmed a weekly A up. US Dollar failed at the weekly A up. Copper also failed at the weekly A up. The Dow and Nasdaq failed at the weekly A down but the Russell 2k confirmed a weekly A down. Very messy picture.
Quote from acdtrader:
If you don't mind, how do you come up with your stops?
I use a factor of 10 day atr such as 0.5 or 0.4 or 0.6 X ATR
All my stops are ACD based not fixed. So on failed trades it's pretty straightforward. I use either the A level or the wick outside the A level. On confirmed trades, i stop out if price CLOSES back inside the A levels. a lot of people won't like this because your stop can vary but to me if you get long on an A up and price closes back below the A up, that is a very ominous sign "usually".
Another stop I use is the confirmation stop. In other words, say I get short on a confirmed monthly A down then the following week we get a confirmed weekly A up, then I stop out at that confirmed level because the market is confirming strength. On a weekly, you could stop out on a daily, etc. This goes along with the time stop concept. If price confirms, I want it to run, not pullback inside the A levels. I realize you will prematurely stop yourself out of good trades that way, but the best trades then screw around, they just take off. Those are the ones you want.
Maverick - thanks for this stuff - very thoughtful and very much appreciate your feedback. It makes sense, I have added this study called as "follow through" to my list of studies that i develop for ACD version 2.0. Once I have it ready, I will share the results on the blog.
This is what I have experienced first hand
"The problem I have with simply testing the robustness of the OR high or low is that one can get killed getting stopped out of trades well inside the OR especially in high volatility markets. " and I cannot agree enough); Most of my drawdown periods seems to resemble breakouts not really breaking out
By this "confirmed A trades at the very minimum hit the ATR a majority of the time. This gives you something to work with as you are no longer testing whether or not you will be stopped out but whether or not the trade actually has "follow through" to the ATR"
Do you mean - lets say buy CL for $100 (because a confirmed AUp happened at or around that level) -> next I measure how many times did CL got to $101 (lets assume ATR = $1) before it hit the Stop (lets say we can set the stop at 0.5 X ATR)
I have a number line indicator that I have created - can you share some ways of using it
****
I think a better study would be to look at the number of times a confirmed A up or confirmed A down closes at or near the highs or lows of the day respectively in order to calculate expectancy. The problem I have with simply testing the robustness of the OR high or low is that one can get killed getting stopped out of trades well inside the OR especially in high volatility markets.
I think what you want to test is "follow through". A while back a buddy of mine tested this on trade station and it was indeed proven that confirmed A trades at the very minimum hit the ATR a majority of the time. This gives you something to work with as you are no longer testing whether or not you will be stopped out but whether or not the trade actually has "follow through" to the ATR.
The other benefit this study has it that it negates the importance of OR time frames since what we are testing is follow through to the ATR, we no longer need to worry whether one uses a 5 min or a 30 min OR as the ATR level should be constant. This keeps things much more clean.
This is what I have experienced first hand
"The problem I have with simply testing the robustness of the OR high or low is that one can get killed getting stopped out of trades well inside the OR especially in high volatility markets. " and I cannot agree enough); Most of my drawdown periods seems to resemble breakouts not really breaking out
By this "confirmed A trades at the very minimum hit the ATR a majority of the time. This gives you something to work with as you are no longer testing whether or not you will be stopped out but whether or not the trade actually has "follow through" to the ATR"
Do you mean - lets say buy CL for $100 (because a confirmed AUp happened at or around that level) -> next I measure how many times did CL got to $101 (lets assume ATR = $1) before it hit the Stop (lets say we can set the stop at 0.5 X ATR)
I have a number line indicator that I have created - can you share some ways of using it
****
I think a better study would be to look at the number of times a confirmed A up or confirmed A down closes at or near the highs or lows of the day respectively in order to calculate expectancy. The problem I have with simply testing the robustness of the OR high or low is that one can get killed getting stopped out of trades well inside the OR especially in high volatility markets.
I think what you want to test is "follow through". A while back a buddy of mine tested this on trade station and it was indeed proven that confirmed A trades at the very minimum hit the ATR a majority of the time. This gives you something to work with as you are no longer testing whether or not you will be stopped out but whether or not the trade actually has "follow through" to the ATR.
The other benefit this study has it that it negates the importance of OR time frames since what we are testing is follow through to the ATR, we no longer need to worry whether one uses a 5 min or a 30 min OR as the ATR level should be constant. This keeps things much more clean.