The ACD Method
- Thread starter sbrowne126
- Start date
I thought I would post a chart giving you guys ideas on how you can use macro ACD. This is probably more for RCG since he trades currencies. This is what my macro FX grid looks like. It's a huge grid of all the FX pairs in rows by the same currency. So we have 4 rows. We have the Euro pairs, the Dollar pairs, Yen pairs and the Swissy pairs.
This is what my monthly grid looks like. It allows one very quickly to get a quick feel of where the real strength or weakness is. I want to note something on the dollar pairs. To make the visual easier, I inverted some of the pairs so all the dollar pairs have the dollar as the base currency. This allows your eyes to see the strength or weakness much clearer. For example, the 2nd row which are the dollar pairs, there are 3 currencies where the dollar is the non base currency (yen, loony and swissy). By using a - sign, the currency will invert on the chart.
So by taking a very quick glance at this chart, you can immediately see that the dollar is very strong against all the major pairs. The only pairs where there are no monthly A downs yet are the loony and the swissy. You can see this right away.
Organizing information is very important to trading. BTW, I only inverted the dollar pairs but certainly you could do this with all the pairs to make it easier to compare charts.
This is what my monthly grid looks like. It allows one very quickly to get a quick feel of where the real strength or weakness is. I want to note something on the dollar pairs. To make the visual easier, I inverted some of the pairs so all the dollar pairs have the dollar as the base currency. This allows your eyes to see the strength or weakness much clearer. For example, the 2nd row which are the dollar pairs, there are 3 currencies where the dollar is the non base currency (yen, loony and swissy). By using a - sign, the currency will invert on the chart.
So by taking a very quick glance at this chart, you can immediately see that the dollar is very strong against all the major pairs. The only pairs where there are no monthly A downs yet are the loony and the swissy. You can see this right away.
Organizing information is very important to trading. BTW, I only inverted the dollar pairs but certainly you could do this with all the pairs to make it easier to compare charts.
Quote from Shanb:
Does anybody know if there is an indicator for ACD in Thinkorwim? I've been searching, but no luck. Even something as simple as a pivot range indicator would help, so I don't have to calculate and draw them out every time.
Any help would be appreciated
no such thing in canned indicators. The market (spy) has shot straight up on a 60 minute chart since 9/13. Remember volatility is high so you should think seriously about smaller contract size and wider stops. You can really get burned, meaning you can see a 3-4% move intraday and get burned. I am only taking long scalps here, mkt may go to 1180 or 1250 ES. My guess is a test near 1180 then rocket back to 1250 area. Good trading.
Monster day today in AAPL. Monthly A up was 399. Intra-day A up was 399.25. Great example of how one can take the breakout in the intra-day trade and stay for the monthly ride.
Safe to say most people using ACD stay away from using the sytem for daytrading. I went back and looked and several charts to see if it could be used successfully for daytrading, and I noticed that while in theory the system makes a lot of sense, in practice you get whipsawed a lot if used for daytrading.
There are some periods during which it seems that it works great, but then you soon realize that a brutal period follows during which as soon as you open a position, you get kicked out and the stock/currency/commodity goes in the opposite direction all day long.
It seems that it is more promising when used for swing trades. Which brings us to a common theme: daytrading is extremely difficult and it seems that those who make a living with it rely on scanners/filters that tell them where the action is. Still, they are now facing the big enemy, HFT, which is blamed for creating false "action".
There are some periods during which it seems that it works great, but then you soon realize that a brutal period follows during which as soon as you open a position, you get kicked out and the stock/currency/commodity goes in the opposite direction all day long.
It seems that it is more promising when used for swing trades. Which brings us to a common theme: daytrading is extremely difficult and it seems that those who make a living with it rely on scanners/filters that tell them where the action is. Still, they are now facing the big enemy, HFT, which is blamed for creating false "action".
I'm in the process of launching an intra-day equity strategy for ACD. So far it has worked flawlessly. I suspect it works better for stocks then futures intraday because you have thousands of stocks to choose from. There is more alpha there.
I've been trading for 15 years and I do not think swing trading is easier then daytrading. They both have their pros and cons. Overnight limit moves in futures are very real and very painful. I have worked out a lot of the kinks of the swing time frame but one needs to think very carefully about what they are doing.