The ACD Method

Maverick74 · Jan 16, 2012

Quote from MBC:

As of this writing it has recovered 50 percent of the "gap" down as you say or 2 %

Are yo ua seller here ?

I would not be

No, I would not be a seller here. I stated on this thread that I thought the ideal cover was the QTR A down at 2.69. Granted we went through that level by a bit, but I still believe that was where one should cover if they were short at the monthly A down.

Having said that, I have no idea where the ultimate bottom will be, I just play the ACD levels. So I would look at the new weekly levels and again when we get to Feb, the new monthly levels. I would NOT be bottom picking Nat Gas that is for sure.

Maverick74 · Jan 16, 2012

Quote from mfbreakout:

Hi DV 4623.

Futures are LEVERAGED to begin with by adding leverage to ones EQUITY, it becomes very difficult in my opinion. Plus trading from home without institutional support for development, new ideas etc.. can make one comfortable and by the time one realize that one has to change it is too late. As Bella said in closing remarks

" successful independent trader that is more than just the development as an intraday equity trader. The days of sit down and JUST learn to be a discretionary intraday equity trader are gone for almost all. This is still the best place to start your trading career for many reasons. This is still the best way to build your trading foundation. But this will not be the beginning and the end anymore for the new and developing trader."

Thus, I have decided to start looking for opportunities to join a prop firm.

Good luck on finding a prop firm. You may want to start reading up on stat correlation and spread trading as almost all prop firms engage in primarily spread trading. I can't think of any discretionary directional traders at futures prop firms. You might also want to start looking at moving to the Windy City. Almost all the prop firms are here and they don't hire remote traders. Good luck mfb. Let us know how it goes.

MBC · Jan 16, 2012

Quote from Maverick74:

Good luck on finding a prop firm. You may want to start reading up on stat correlation and spread trading as almost all prop firms engage in primarily spread trading. I can't think of any discretionary directional traders at futures prop firms. You might also want to start looking at moving to the Windy City. Almost all the prop firms are here and they don't hire remote traders. Good luck mfb. Let us know how it goes.

Why did not MBF discuss spreads in the logical trader ?

Do they use the ACD method now/today?

They trade Cal. strips now correct ?

Maverick74 · Jan 16, 2012

Quote from MBC:

Why did not MBF discuss spreads in the logical trader ?

Do they use the ACD method now/today?

They trade Cal. strips now correct ?

The Logical Trader was meant to be a very basic foundation of ACD. Not an inside look to how he or his firm trades. And it's my understanding they only trade spreads now, mostly strips in crude and nat gas as well as market making on the floor of the NYMEX in options.

Shanb · Jan 16, 2012

Quote from Maverick74:

Good luck on finding a prop firm. You may want to start reading up on stat correlation and spread trading as almost all prop firms engage in primarily spread trading. I can't think of any discretionary directional traders at futures prop firms. You might also want to start looking at moving to the Windy City. Almost all the prop firms are here and they don't hire remote traders. Good luck mfb. Let us know how it goes.

When I interviewed at Geneva recently I was surprised to here that many of their traders were "point and click" for the most part. The trading development guy there was telling me that many of them were scalping spreads intraday and still doing relatively well. I mentioned stat arb and automated spreads...he said that while some of the guys used it, many were more discretionary. Just something to throw out there.

Shanb · Jan 16, 2012

John,

This may not be a question you want to answer in a public forum, but thought I might ask

.

How was your trading performance this year relative to the past 4-5 years?

The reason I ask is I just saw Lescor's updated numbers for the past year and it looks like he didn't do anywhere near what he has done in the past. I know he does alot of grey box mean reversion stuff, could very well be that there is increased competition there.

Maverick74 · Jan 16, 2012

Quote from Shanb:

When I interviewed at Geneva recently I was surprised to here that many of their traders were "point and click" for the most part. The trading development guy there was telling me that many of them were scalping spreads intraday and still doing relatively well. I mentioned stat arb and automated spreads...he said that while some of the guys used it, many were more discretionary. Just something to throw out there.

Yeah, that is good to here. Geneva is a good shop. Been around awhile. Although I do believe they are still pretty high frequency. I've seen their ads looking for traders and they always mention that they are looking for algorithmic HFT style traders. Shan, are they only trading futures there, or do they trade equities as well, do you remember?

Shanb · Jan 16, 2012

Quote from Maverick74:

Yeah, that is good to here. Geneva is a good shop. Been around awhile. Although I do believe they are still pretty high frequency. I've seen their ads looking for traders and they always mention that they are looking for algorithmic HFT style traders. Shan, are they only trading futures there, or do they trade equities as well, do you remember?

Hmmm, perhaps they are trying to get more algo based people in there. They are only trading futures from what I remember.

Maverick74 · Jan 16, 2012

Quote from Shanb:

John,

This may not be a question you want to answer in a public forum, but thought I might ask .

How was your trading performance this year relative to the past 4-5 years?

The reason I ask is I just saw Lescor's updated numbers for the past year and it looks like he didn't do anywhere near what he has done in the past. I know he does alot of grey box mean reversion stuff, could very well be that there is increased competition there.

Wow, just saw his thread. I think Lescor's numbers show exactly what is going on in the industry, especially in the equity world. I just talked to my mentor from my Worldco days 10 years ago. He was bar none the best equity trader I have "personally" met. He was the definition of consistency. So I was eager to ask him how he was doing in this market environment. He is a tape reader for listed stocks. It turns out he quit trading for the most part in 2009. He said the equity industry just completely changed. Completely new world. That was pretty shocking.

As for me personally, I ran a market neutral options strategy utilizing ACD for equities Jan through Aug and had my best risk adjusted performance ever. The last QTR of the year I began experimenting with other strategies partly due to some of the changes at my firm which you are aware of Shan. I started making some transitions. I was pleased with the last QTR but I did a lot less trading and a lot more building and developing of new strategies.

Most people who know me know I am "always" working on new ideas and new strategies. Regardless of whether what I'm doing at the time works or not because I'm all too aware of how quickly things change in this business. I have discussed that at length on this thread.

Shanb · Jan 16, 2012

Quote from Maverick74:

Wow, just saw his thread. I think Lescor's numbers show exactly what is going on in the industry, especially in the equity world. I just talked to my mentor from my Worldco days 10 years ago. He was bar none the best equity trader I have "personally" met. He was the definition of consistency. So I was eager to ask him how he was doing in this market environment. He is a tape reader for listed stocks. It turns out he quit trading for the most part in 2009. He said the equity industry just completely changed. Completely new world. That was pretty shocking.

As for me personally, I ran a market neutral options strategy utilizing ACD for equities Jan through Aug and had my best risk adjusted performance ever. The last QTR of the year I began experimenting with other strategies partly due to some of the changes at my firm which you are aware of Shan. I started making some transitions. I was pleased with the last QTR but I did a lot less trading and a lot more building and developing of new strategies.

Most people who know me know I am "always" working on new ideas and new strategies. Regardless of whether what I'm doing at the time works or not because I'm all too aware of how quickly things change in this business. I have discussed that at length on this thread.

Interesting and good to hear! Seems like alot of the daytrading equities guys in my office had much of the same experience, especially after August when Vol really came off. The more I learn about this business, its not just getting to the high level it's staying there. Many other businesses are like this, but the rate at which one must adapt seems to be higher in trading.