The ACD Method
- Thread starter sbrowne126
- Start date
We failed at my weekly A up today in ES at 1170. This brings the 1102 weekly A down price target in play. However, let me point out that I'm not sure the indices are the best play right now to play the deflation trade. I only say that because the indices are very messy and crowded.
Let me point you towards the Swiss Franc. We bounced off the monthly A down at 124.32 and today we bounced off the weekly A down at 125.08. I'm referring to 6S (Swissy Dollar). The swing high on the market selloff was 1.4167. I think this trade might be less messy then playing the spoos.
Another product to watch is Coffee which is quietly breaking out. Monthly A up was 252 and it closed above the weekly today at 275. The level to watch is the QTR at 283. We take that out and she might gun it for the highs at 309. The Ten year (ZN) bounced off the weekly A down today at 129'18. This trade is also much cleaner then the spoos.
aug 15 interview, this guy articulates current events very well. Good stuff.
http://www.kingworldnews.com/kingwo...Jim_Rickards_files/Jim Rickards 8:15:2011.mp3
http://www.kingworldnews.com/kingwo...Jim_Rickards_files/Jim Rickards 8:15:2011.mp3
speaking of Richard Nixon, there is great line in the movie about watergate, the line is "follow the money", all small traders are in the shadow of the large, and I mean large trading institutions, there are the majors, jpm, gs, bridgewater, etc. and then the smaller major players, funds, hedgies etc. I have seen quite a few arguments over the years regarding how to " follow the money" . flows, TA, volume analysis. The reason I post Rickards stuff is because he is the only person I have seen in the vast empire of trading, media and general talking out of one's ass seen daily here on ET, that gets the REAL tug of war between inflation and deflation, this is some real serious and scary shit. Price is everything to buyers, small businesses come and go, the macro is where the big money is made, why has the stock market deflated lately, we were just at 1370 with mutual fund hacks calling for 1450 etc. So what is really going on? What are the big houses seeing that we don't see? Remember tomorrow GDP comes out, be prepared.
I have been following this thread with more interest for a few weeks, and went back and read the whole thing. All I can say is thank you to Maverick, and the others who have chimed in with their insight, warnings, and various styles of use of the method.
I went out and bought the book, and am about 1/2 way through. What I like about it is that I like the style of trading. It seems to keep you from getting hurt, and its strict enough to avoid overtrading. And it seems intuitive in the sense that it tries to stack different factors in your favor, b/4 you take a trade.
It seems to focus on the things that I have been studying, and trying to build a system around. I have been looking at developing a system based around price action, volatiity, and basic statistics of equities based on behavior in specific time frames. Focused on price moves from the opening print. (ie, if the stock moved x% from open by 9:45, what % of time did behave in x fashion, type stuff..)
I just havent been able to put it together, but this seems to give me a great template/framework to build upon.
This acd methodology incorporates alot of that, but just does it based on a OR, individual criteria for A formations, and some other goodies.
(I also like that volume isnt stressed. I have ever been able to make heads or tails of anything meaningful looking at volume in different forms, and pretty much thought volatility changes seemed like a better thing to focus on.)
I already have some questions regarding the method, but will withhold them until I read the book completely.
Thanks again for all the info.
edit: (I cant help myself, Just one question : )) I am an equities guy, and I have read over and over the need for "sufficient liquidity" in w/e you choose to trade ACD. Can someone who trades equities with this care to elaborate, on why it supposedly works better?
It seems to me like more of the volatile (frequently consistant, wide % intraday ATR issues) are around the 1M-7M average volume stocks.
Or does he mean "unusually" volatile (news/etc) where there is unusually alot more people trading?
I went out and bought the book, and am about 1/2 way through. What I like about it is that I like the style of trading. It seems to keep you from getting hurt, and its strict enough to avoid overtrading. And it seems intuitive in the sense that it tries to stack different factors in your favor, b/4 you take a trade.
It seems to focus on the things that I have been studying, and trying to build a system around. I have been looking at developing a system based around price action, volatiity, and basic statistics of equities based on behavior in specific time frames. Focused on price moves from the opening print. (ie, if the stock moved x% from open by 9:45, what % of time did behave in x fashion, type stuff..)
I just havent been able to put it together, but this seems to give me a great template/framework to build upon.
This acd methodology incorporates alot of that, but just does it based on a OR, individual criteria for A formations, and some other goodies.
(I also like that volume isnt stressed. I have ever been able to make heads or tails of anything meaningful looking at volume in different forms, and pretty much thought volatility changes seemed like a better thing to focus on.)
I already have some questions regarding the method, but will withhold them until I read the book completely.
Thanks again for all the info.
edit: (I cant help myself, Just one question : )) I am an equities guy, and I have read over and over the need for "sufficient liquidity" in w/e you choose to trade ACD. Can someone who trades equities with this care to elaborate, on why it supposedly works better?
It seems to me like more of the volatile (frequently consistant, wide % intraday ATR issues) are around the 1M-7M average volume stocks.
Or does he mean "unusually" volatile (news/etc) where there is unusually alot more people trading?
I think since Fisher comes from the futures world, the lack of liquidity in "some" stocks scares him. Keep in mind, he doesn't swing around 100 shares of stock. Also keep in mind he wrote the book in 2001 or so and back then he was advocating using the bottom of the opening range as a stop. In some stocks, if they roll over and take out the lows of the opening range, they could gap down dollars in a hurry.
I personally think all products work equally well with ACD. I wouldn't be trading penny stocks or stocks that avg less then 250k shares a day. My personal experience shows that ACD works quite well with equities.
Just throwing my approach out there for a variation on the theme.
Some premises I am forward testing are continuation moves running into the next day's open, without exiting earlier unless on a stop. Entering at the A level, and at C on a failed A-up/down, given enough time holding above/below. I'm trying to supplement my current medium-term trading with shorter moves, as well as use certain setups to enter into positions earlier. But I don't have much success beyond closing profitable short term setups at the next day's open. How to put the puzzle pieces together to better visualize the big, longer term picture is what I'm ultimately after.
Cross-market analysis requires a bit of nuance I'm not ready to bring in just yet, but seems to offer the most promise down the road, as my main method requires tracking the relative behavior of other instruments in order to trade the indices. This is why I was drawn to ACD. Building a custom indicator based on ACD principles across multiple instruments is not easy to approach in a formulaic manner though.
For those of you who incorporate weekly levels, do you just use Monday's H-L +- A&C, based on a % of the 30 ATR? How do you use the weekly behavior in relation to intraday -- as a filter for the latter, or just to establish longer term positions, as Maverick demonstrated?
Some premises I am forward testing are continuation moves running into the next day's open, without exiting earlier unless on a stop. Entering at the A level, and at C on a failed A-up/down, given enough time holding above/below. I'm trying to supplement my current medium-term trading with shorter moves, as well as use certain setups to enter into positions earlier. But I don't have much success beyond closing profitable short term setups at the next day's open. How to put the puzzle pieces together to better visualize the big, longer term picture is what I'm ultimately after.
Cross-market analysis requires a bit of nuance I'm not ready to bring in just yet, but seems to offer the most promise down the road, as my main method requires tracking the relative behavior of other instruments in order to trade the indices. This is why I was drawn to ACD. Building a custom indicator based on ACD principles across multiple instruments is not easy to approach in a formulaic manner though.
For those of you who incorporate weekly levels, do you just use Monday's H-L +- A&C, based on a % of the 30 ATR? How do you use the weekly behavior in relation to intraday -- as a filter for the latter, or just to establish longer term positions, as Maverick demonstrated?
Coffee 284