The ACD Method

"prospect theory" one of the previous posts Mav was explaining this to me , i tried adding the link to the video but failed miserably lol :confused:. the video touches upon the subject of prospect theory but from the eyes of a hedge-fund and how it can be used to exploit structural alpha (thought it might be interesting)


http://mapleleafcapital.com/?page_id=10

These guys have some good white papers on trading vol on their website. Take a look.
 
Thanks Mav downloaded them , defo sommet i will be reading , and guys if you require research papers or any businesses journals hit me up i have access to a few papers but only for a short period of time.:)
 
I thought we might sell off as well being that GOOG was up 10% in AH yesterday and the spoos were unched. Also the strength in Bonds has been bearish. There definitely are some conflicting signals here. Small caps are breaking down but Nasdaq breaking out. Bonds are getting bid and the yield curve got smoked today. Vol is getting crushed but my macro risk indicator is getting more bullish. Add it up and you have Chop Suey. I think your best bet to short risk is to buy Bonds.

yep i agree from macro perspective i'm bullish to a degree (dollar does have some strength) also agree with Mav that where probably gonna see some chop within the market , i think that the market's have fully priced in the euro crisis (till this point) but one variable that i think (lol i'm often wrong) wasn't considered is the US deal agreement with the Iranian's (should see extra supply within the market in the near future , may possibly be a reason for the pullback) i think the commodity currencies are weak and also oil sectors , if i was shorting i would wait for oil sector to gain some strength with addition to commodity currencies , i don't really have the number lines for oil or the bonds but i would take Mav advice and short risk by buying bond's but watch for strengthening commodity currencies and strengthening oil prices prices to help time your short.

disclaimer most of the time i don't know what i'm on-about so i would advice you to dismiss most of what i'm saying lol
 
Everything I do with ACD is a derivative. In other words, I look for second and third order effects. I never look at first order effects. And yes, it's VERY valuable.

Hello Mav,

Can you expand on that? What would be an example of a "First order effect" that you never look at?

As far as I know, you are the first who came up with weekly, monthly, quarterly and yearly A levels. What would they be? Also the 5 day rolling and monthly are yours. What are they?

Thanks
 
Hello Mav,

Can you expand on that? What would be an example of a "First order effect" that you never look at?

As far as I know, you are the first who came up with weekly, monthly, quarterly and yearly A levels. What would they be? Also the 5 day rolling and monthly are yours. What are they?

Thanks

It's in the ebook. :)
 
A few Sunday number lines of general market ETF’s. These are all created using a 10 minute OR and a full 10 minute confirmation.

It’s worth noting a number of NL confirms with a diverging monthly A level.

The sp500 had 12 monthly A ups on Friday with the most notable being MSFT. There were 11 monthly A Downs with the current usual suspects being AA, CNX, COP and MUR.

There were no breakout Sushi Rolls but 10 breakdowns. Five of them were also 52 week lows: CVX, DO, ESV, RRC, and SE.
 

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I looked over the regular Google answers and then searched the thread and my ebook but I got a Goose egg with those. I'll keep looking. :)

I've talked about the topic quite a bit. I'm not going to expand on it as I have a general rule not to discuss things currently baking in the oven. :)

Everyone on here has a different level of math and statistics background so I don't want to spend too much time going over college calculus. Although the word calculus should clue you in as to what I'm referring to. The last month alone I've created about 4 new indicators and 4 new spreadsheets of data validating them. The work never stops!
 
This USD/CAD wants to go parabolic.

fx_image.ashx
 
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