The ACD Method
- Thread starter sbrowne126
- Start date
If you had told me in the past that I would have consistant profit for a few months and then realize I didn't like trading I would have laughed. But that is what has happened. I have found that I just don't want to put my energy and effort into trading. By taking that effort and redirecting it elsewhere I am finding great success at work and realizing my dreams. I just have no interest in looking at charts and watching markets anymore. Go figure.
BTW I wish I had a thread like this when I first discovered trading 10 years ago. Maverick has done a great service for free here and I'm sure it will help many people in their trading.
Anyways that is where I have gone.
Good luck everybody!
This thread tends to cover a wide variety of things. One thing that we haven't talked about alot is trader psychology. Steenbarger's old blog is really a gem.
Here's something I cam across regarding Learned Optimism:
http://traderfeed.blogspot.com/2010/01/recent-post-on-attributional-style.html
I think surviving and excelling in this game requires a strong frame of mind more than anything. Having a healthy frame of mind, combined with desire and talent and you can become the trader you dream of being. Read, absorb, and enjoy peeps
Here's something I cam across regarding Learned Optimism:
http://traderfeed.blogspot.com/2010/01/recent-post-on-attributional-style.html
I think surviving and excelling in this game requires a strong frame of mind more than anything. Having a healthy frame of mind, combined with desire and talent and you can become the trader you dream of being. Read, absorb, and enjoy peeps
I am still around and reading/learning but I feel like I dont have much to offer, and I kind of felt like I was always asking questions and not giving anything back in return. (I didnt want to be "that guy" who was always asking questions, but not bringing anything to the table.)
Mav, I have learned a ton from your stuff, and it has opened up many different ways of looking at things. I am still trying to put it all together, but I also feel like the way I am trying to trade isnt the same products and timeframe you guys are, so feel like I dont have much to add.
(As much I hear about them, I dont get spreads to be honest. I understand mean reversion pairs trading, but directional spreads I dont really get, regardless of how much good of directional opportunity they provide. I also assume its more swing trading than daytrading with those spreads.)
My biggest issue is still product selection with daytrading equities. It seems like the things that have the biggest chance of moving have very volatile opens, and large and sloppy OR/ATR ratios. was hoping that finding small ratios would present itself with low risk opportunities, but small OR's seem sto lead to choppy days for those stocks.
(And when they do have big days, the moves happen in the first few minutes it seems, so with stocks it is almost the anti-ACD strategy that would work.)
So, I am still at it, but that plan isnt working out as intended.
I daytrade those spreads that you are talking about! You are right about one thing, product selection is the most important thing with day trading equities. What the hell does one trade throughout the day?
Honestly I would forget about scanning for small OR's and all that stuff just focus on the price action. Keep it simple for yourself. Pick a list of 10 or so stocks that seem to have decent volatility and are currently in play and will be for the next month or so. Put these up on your screen and observe how they react with the market. When the market is strong what is holding a strong bid and vice versa. Get used to watching the character of the stock, when is there a change in behavior, because alot of times you can see if a real move is happening after you watch something long enough.
Also keep in mind how much volume a stock has done, if a stock is going to have an aup/adown with follow through there is going to be some volume there. a move with 1.5 relative volume is going to have more legitimacy than one without.
Then just focus on entering at a good area. The entries that tend to work with stocks that are breaking out are usally the pullbacks to the a levels after confirmation. If lets say AAPL makes an aup and pulls back to the level and holds take it long.
I've posted this link before but the guys at T3 are good equity traders and are good at identifying things that will be in play. I watch the morning show and daily recap just to keep up with what things are in play.
http://www.t3live.com/
Looking at the news in the morning is important as well. Look at SINA today, huge move, it hard earnings yesterday. What you are going to see is that there are always certain sectors and names that are in play and these things tend to cycle. Lately names like AAPL, FOSL, MA, V have been in play and have given good trading opportunities throughout the day. You just have to keep abreast with what is breaking out and breaking down and has volume coming into it. MA has been in play this whole past month ever since it broke out to new highs in the beginning of the month it has been a very good trade.
Thanks for the advice Shanb. I think narrowing down my list would be the best. Its finding the fine line b/w trying to watch too much, and not trade it consistantly well b/c you dont really know the products (as you mentioned) or watching too little, and you stare at the dead stuff, when it seems everything is taking off around you.
I managed to catch YOKU today, which I was pleased about.SINA was one on my list, but the large OR scared me off.. and APPL and MA I dont really watch too much b/c they are too pricey for me to trade. I usually focus on < $150.
And I did see that link earlier, and I do plan on listening to it more. I think getting their morning call would be most beneficial.
I think ditching the OR/ATR ratio thing would be good. I was running all sorts of statistics, trying to get an edge on knowing which products recently behave a certain way when they form a tight range, and I think the idea was good, but I am trying to make things too precise. (my idea was to load up stocks in my indicator that frequently move, and from there select and focus on those handful that frequently make decent moves WHEN they have a small ratio.)
I have been using a cheap service (stockfetcher) that I can find stocks based on ADR, and that has been somewhat helpful narrowing down a universe, combined with minimum average volume, and a price range. But using relative volume will help more.
I have also been using a relative strength filter (vs S&P) which simply shows intraday how each stock is doing and I focus on the extreme weakest and strongest..
thanks.