Excellent point. So many guys get too stuck on the idea of what the opening range is. It's not really an opening range. You could just just as well call it a volatility range. The reason the "actual" opening was used for many years is because before we had 24 hours markets, the actual open was very very volatile.
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The ACD Method
- Thread starter sbrowne126
- Start date
Excellent point. So many guys get too stuck on the idea of what the opening range is. It's not really an opening range. You could just just as well call it a volatility range. The reason the "actual" opening was used for many years is because before we had 24 hours markets, the actual open was very very volatile.
Mav, yea I'll email you, let's grab a beer in the next week or so, I was in the process of moving last time I emailed you then was without trading and basically Internet for like 2 months, I'll shoot you an email next week we'll have to chat. _
As for acd...I usually spend a few hours Friday after close to go over all my stock trades for the week, which I'll use acd...the one thing that is probably SO important and highly overlooked is how mark talks about position sizing depending on the commodity or stock - the dollar risk $. _Mav, or anyone else, do you have any formulas that you've come up with to create these $risk values for stocks/commodities? _I'll trade acd with a basket of like 15 stock, and I'll usually just try to find trades that give me a 15-30 cent stop and trade em in 1000 share blocks, then add 1000, 500 if the position works...thing is though, I'll get killed when I trade a stock like GS or AAPL, compared to a ABT, X, BP, CVX...i never know how to position size all the positions.
Also, if your trading stocks, or SPY (which I'll trade in 1500 share blocks during the day, I'll use the opening range of 730amCT (about 10 mins), with a 25 cent A, and .05 C...I'll use 730 because that is pretty much when all the numbers/news come out, so you see a nice reaction to the news right at 730...I'll more or less just watch the mkt closely when the number comes out and wait till the market settles and cools down to give it a OR high/low to use...so basically my day for SP's will always open at 730. _
There was a nice setup using that OR today...mkt was week, down 6 PTS all night, then firming up and going into 730 number trading around .15....730 number came out we, which was ok, mkt started trading up around .20-.25...then cooled off around 745...you could easily use that 15-20 high low OR to get you in and mark some A C values.
Same thing with BP when that stock spiked on the news today...I used that value, was like 4755-4825...first few minutes of that initial buying to give yourself a range to trade, went long at 48.30, with a stop under 4750 and limit _over 49+...I wish BP would have sold off on the news, I would be flipping and going short x3 size if it feel below 4750 (c down on high vol)...
Position sizing fucked me on that BP trade though, cause I got in small, cause my initial risk was so wide, but in reality, even if I would have got in with bigger size I would have used, more or less, time to get me out if the position never started to work for me right away. _So I cut my size big, and immediately got a move to my initial target of 4950 (just a round #, after we broke through offers at 4900), then just getting out at mkt when we went 4950 offer on big size and no buyers up there, stopped out at 4938 after a failure at 50, then lower high on a test of that around 45bid. _
Position sizing on that trade cost me a lot of money on that trade.
Same thing with GS all week...got chopped up Monday to Wednesday playing GS with 500 share lots, then after getting stopped out towards the low on 1000 shares I flipped long but with only 200 at 171.55 (buy stop above yr OR) and now still holding 500 today (kept buying on today's trend day-into earnings next week)...I'm long 500, I should be long, if my discipline was right, I should be long 3000+ looking to sell into Tuesdays gap up and into earnings, holding some through the news with a stop at b/e...
As for acd...I usually spend a few hours Friday after close to go over all my stock trades for the week, which I'll use acd...the one thing that is probably SO important and highly overlooked is how mark talks about position sizing depending on the commodity or stock - the dollar risk $. _Mav, or anyone else, do you have any formulas that you've come up with to create these $risk values for stocks/commodities? _I'll trade acd with a basket of like 15 stock, and I'll usually just try to find trades that give me a 15-30 cent stop and trade em in 1000 share blocks, then add 1000, 500 if the position works...thing is though, I'll get killed when I trade a stock like GS or AAPL, compared to a ABT, X, BP, CVX...i never know how to position size all the positions.
Also, if your trading stocks, or SPY (which I'll trade in 1500 share blocks during the day, I'll use the opening range of 730amCT (about 10 mins), with a 25 cent A, and .05 C...I'll use 730 because that is pretty much when all the numbers/news come out, so you see a nice reaction to the news right at 730...I'll more or less just watch the mkt closely when the number comes out and wait till the market settles and cools down to give it a OR high/low to use...so basically my day for SP's will always open at 730. _
There was a nice setup using that OR today...mkt was week, down 6 PTS all night, then firming up and going into 730 number trading around .15....730 number came out we, which was ok, mkt started trading up around .20-.25...then cooled off around 745...you could easily use that 15-20 high low OR to get you in and mark some A C values.
Same thing with BP when that stock spiked on the news today...I used that value, was like 4755-4825...first few minutes of that initial buying to give yourself a range to trade, went long at 48.30, with a stop under 4750 and limit _over 49+...I wish BP would have sold off on the news, I would be flipping and going short x3 size if it feel below 4750 (c down on high vol)...
Position sizing fucked me on that BP trade though, cause I got in small, cause my initial risk was so wide, but in reality, even if I would have got in with bigger size I would have used, more or less, time to get me out if the position never started to work for me right away. _So I cut my size big, and immediately got a move to my initial target of 4950 (just a round #, after we broke through offers at 4900), then just getting out at mkt when we went 4950 offer on big size and no buyers up there, stopped out at 4938 after a failure at 50, then lower high on a test of that around 45bid. _
Position sizing on that trade cost me a lot of money on that trade.
Same thing with GS all week...got chopped up Monday to Wednesday playing GS with 500 share lots, then after getting stopped out towards the low on 1000 shares I flipped long but with only 200 at 171.55 (buy stop above yr OR) and now still holding 500 today (kept buying on today's trend day-into earnings next week)...I'm long 500, I should be long, if my discipline was right, I should be long 3000+ looking to sell into Tuesdays gap up and into earnings, holding some through the news with a stop at b/e...
Quote from jsmooth:
Same thing with BP when that stock spiked on the news today...I used that value, was like 4755-4825...first few minutes of that initial buying to give yourself a range to trade, went long at 48.30, with a stop under 4750 and limit _over 49+...I wish BP would have sold off on the news, I would be flipping and going short x3 size if it feel below 4750 (c down on high vol)...
Can you elaborate a little further on this for breaking news plays? Do you use a specific time period on breaking news, or do you read the order flow to get the opening range?
Quote from jsmooth:
Does anyone clear through fishers firm, MBF? I plan on going to NYC next month to meet with some people at the nymex about leasing a membership and also in search off a clearing firm, I was planning on contacting MBF. I know all you need to open an account with them is 100k plus data/cqg or tt...are all their traders (that don't do marks prop stuff) just remote, or do they have an office/trading room that all their guys trade from? I'll be contacting the firm, but I'm just curious if anyone has done business with them and has some feedback?
I cleared through MBF some years as a floor trader, and was associated with them as a prop trader. To my knowledge, what you've heard here so far is right - there's the NYC office, Hewlett in Long Island, and a Miami Beach office. I'm not sure of the exact number, but would guess they peaked at around 50 prop traders in the 2000's, and have been cutting it back in recent years.
Mark is a great trader, also very talented businessman, and all round colorful character. MBF is 100% legit, will perform on any deal they make, and used to be a good environment for prop traders. I believe Mark used to back traders with a variety of approaches, monitor their risk closely and let them do their thing. MBF was not a place to be if you were looking for direction - not sure they ever produced too many winning off-floor prop traders using acd method.
I understand they've been focusing on their hedge fund, and continue to reduce prop trading, but it's certainly worth investigating. Good luck.
you had a slam dunk short sell stop limit below the day (and month OR) in LVS today at the 4714 level, I was watching it and when it broke below that level it broke so fast I couldn't get it in on my orders. Not sure if LVS had made an "official A up" but it opened up, with nice volume, then volume feel, and then collapsed through that day and year OR. I would consider that a nice C down setup. That's probably the easiest ACD setup to take...get an OR value for a stock, note the yr/mm/wk OR then look for an A up (or down), then place some sell short limit orders below the Or with a time stop also...if u don't see an immediate move, get out.
INFJ, where do u ex floor guys go to trade? I worked with a cbot ag floor guy during the commodity boom a few years back, by he left the floor cause of the volatility and risk him and his team was taking on...he tried trading the screen after that and just gave up after a few months and retired. I went to an equity prop, more or less a bucket shop, with all pikers and gamblers...it was pretty much a waste of 8 months...I'm going to lease a seat, and would just goto the floor and sp pits with 100k, but with no volume and everything going electronic, where do all the future prop guys go? I've had an office over the past year, but I hate working by myself, I want to be surrounded by other traders that are serious about market making and trading. If there was any volume left in the big spooz pit i'd just head down there? But I don't want just be the guy that's trading 2 lots and just hitting the BxA all day.
Where do u ex floor guys go to trade?
Where do u ex floor guys go to trade?
Quote from jsmooth:
INFJ, where do u ex floor guys go to trade? I worked with a cbot ag floor guy during the commodity boom a few years back, by he left the floor cause of the volatility and risk him and his team was taking on...he tried trading the screen after that and just gave up after a few months and retired. I went to an equity prop, more or less a bucket shop, with all pikers and gamblers...it was pretty much a waste of 8 months...I'm going to lease a seat, and would just goto the floor and sp pits with 100k, but with no volume and everything going electronic, where do all the future prop guys go? I've had an office over the past year, but I hate working by myself, I want to be surrounded by other traders that are serious about market making and trading. If there was any volume left in the big spooz pit i'd just head down there? But I don't want just be the guy that's trading 2 lots and just hitting the BxA all day.
Where do u ex floor guys go to trade?
You might want to check out HTG. A lot of futures guys over there and pretty independent.
Too keep this acd discussion going, you may want to look into this setup...the past month, with the markets just inching higher each day (and not really any range expansion). _Breakout strategies, acd- a up type setups - aren't really working. _I've been doing this and it's been quite effective to buying dips and adding to them for a 2-3 day swing trade. _Find a stock...note the opening for the year/month, week, day and fishers pivot point formula. _Find a stock that's sold off and it's trading near/above the year (and month) opening price...the next trading day, this level should serve as a long term support to put this on....let the stock open, note the opening print and the days PP (and pivot high-low). _You want the stock to open down from the OR, but not trade below the year/month opening level (or if it does, trade below and have a failed a down type action. _If that happens note the current days low and place buy limit orders above the mkt right above the days opening range and pivot point (which should be just above the day OR value)...if you get hit place a stop below the days low or a mental stop if it makes an a down. _If it makes an a up, start adding to the long and moving stop below the days opening price. _You would be surprised how effect this trade works in this type of market especially with a stock that has earnings, trades down, but rebounds mid day. _It works even better if you can find a play with a nice tight pivot, cause you can expect increased volatility for the day and it will turn into a trend day cause all the late shorts are getting caught selling short into the low. _
I played this action in DNDN yesterday, getting long on buy stops at 3513...take a look at the chart and note the values it will give you a good picture of the setup.
I played this action in DNDN yesterday, getting long on buy stops at 3513...take a look at the chart and note the values it will give you a good picture of the setup.
Quote from jsmooth:
Too keep this acd discussion going, you may want to look into this setup...the past month, with the markets just inching higher each day (and not really any range expansion). _Breakout strategies, acd- a up type setups - aren't really working. _I've been doing this and it's been quite effective to buying dips and adding to them for a 2-3 day swing trade. _Find a stock...note the opening for the year/month, week, day and fishers pivot point formula. _Find a stock that's sold off and it's trading near/above the year (and month) opening price...the next trading day, this level should serve as a long term support to put this on....let the stock open, note the opening print and the days PP (and pivot high-low). _You want the stock to open down from the OR, but not trade below the year/month opening level (or if it does, trade below and have a failed a down type action. _If that happens note the current days low and place buy limit orders above the mkt right above the days opening range and pivot point (which should be just above the day OR value)...if you get hit place a stop below the days low or a mental stop if it makes an a down. _If it makes an a up, start adding to the long and moving stop below the days opening price. _You would be surprised how effect this trade works in this type of market especially with a stock that has earnings, trades down, but rebounds mid day. _It works even better if you can find a play with a nice tight pivot, cause you can expect increased volatility for the day and it will turn into a trend day cause all the late shorts are getting caught selling short into the low. _
I played this action in DNDN yesterday, getting long on buy stops at 3513...take a look at the chart and note the values it will give you a good picture of the setup.
I noticed the same. I am trying to just focus on NR7/NR4 dailys to increase the effectiveness of ACD, but even some of those in last month, nada. Last couple of days USD/DX, double NR7, and almost zip today.