I guess that the key then is to find a way to filter those stocks that behave good under the acd method, because so far I only found stocks that move all over the place during a typical day. They do have some good "acd days", but for the most part they get in and out of the OR levels without providing any real edge to the trader. You make the OR too small, and you get whipsawed. You make it too wide, and you take out too much of the daily ATR to make any profit with a good risk reward (a large OR implies a large stop).
The ACD Method
- Thread starter sbrowne126
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I guess that the key then is to find a way to filter those stocks that behave good under the acd method, because so far I only found stocks that move all over the place during a typical day. They do have some good "acd days", but for the most part they get in and out of the OR levels without providing any real edge to the trader. You make the OR too small, and you get whipsawed. You make it too wide, and you take out too much of the daily ATR to make any profit with a good risk reward (a large OR implies a large stop).
I agree, I'm not saying it's easy. I've put 5 years of work into all things ACD. The effort does pay off.
Well I know the ACD seems to be traditionally a trend following system, but As Maverick mentioned earlier in the thread, using wider OR, and wider ATR bands, you can use it as a fading system.
As far as finding the correct stocks, this is something I am looking into. I created a simple indicator that shows what % of the time in last X days, a stock gained/lost more than x%.
Then I also tried to find one that shows alot of intraday movement, but a mean reversion behavior and a open vs. close of less than x%. My attempt to find doji-like behavior..
and the stocks that have a decent intraday swing, but often revert.
What you find is its hard to find anything more than 50-65% of the time, but with decent risk/reward, it seems like this might have promise.
I have yet to actually trade yet with this method, still taking it all in.
What you find is its hard to find anything more than 50-65% of the time, but with decent risk/reward, it seems like this might have promise.
I have yet to actually trade yet with this method, still taking it all in.
I have said this before and I will say it again. Let me be absolutely clear about this. I believe more in this next statement then I do that the sun will rise in the east tomorrow. If you are NOT already a profitable stock trader or a daytrader then no ACD levels will make you one period. I cannot stress this enough.
I have traded a lot of stock in my life. I understand the nuance of stock trading. If you have never been a good stock trader, then slapping opening ranges on your charts with A levels around them is not going to be effective. That's just the way it is. I know there are a lot of guys out there struggling looking for something. And I feel for them. Every trader has been there. But there is no magic with ACD.
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
I am not sure what do you mean by ACD indicator? www.thinkscripter.com has a suite of studies for TOS. I use TS opening range cloud to draw opening range, TS 3 day rolling pivot for 3 day rolling pivot ranges etc.. One time fee is $65.
www.mypivots.com, $30 a month , this forum provides a ton of very useful tool for ACD, market profile etc.. However, auto lines are drawn only for e-signal platform as the host of this forum uses e signal.
One can just note down daily pivot range, 3 day rolling pivot range etc.. if not using e-signal.
I have not used ACD reference points to trade stocks as i find it very difficult to keep track of all the reference points for various stocks.
I day trade crude oil futures full time. I have friends who day trade crude oil futures using other methods than ACD. For me , i can not trade without ACD reference points.
Before I got comfortable with ACD system, I had to spend 500 hours on SIM to get a feel for failed A up/ A down, impact of tight pivot tracker value on VOLATILITY for that day, impact of price opening above daily pivot, 3 day rolling pivot etc.. but closing below these reference points, impact of 30 days number line etc..
So, there is a lot than just A up or A down. I was not a successful trader before i decided to focus on ACD.
ACD gave some breathing room ( light at the end of long dark tunnel) to keep at trading while refining ACD and learning other trading systems for days when ACD set ups are not simply there.