The ACD Method

Quote from Maverick74:

Currency funds are horrible. Currencies can go years and years without any meaningful moves and then in one year explode, usually during a crisis of some sort. You need to spread your money around. That could be stock, commodities, debt or currencies.

Why miss a mega move in Gold trading a range bound currency? Why trade stocks when the VIX is at 13 when grains are going limit up every day? The best funds spread out there bets. If they don't, they will fall victims of 1 good year followed by 2 bad years of performance. All you have to do is look at the performance numbers of CTA's that focus on only market or hedge funds that focus in one small area.
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Case in point, here are the numbers for John Taylor's FX Concepts. He runs the largest currency fund in the world, around 8 billion, strictly currency.

As you can see, his numbers go back and forth between good year and bad year.

https://docs.google.com/viewer?a=v&...&sig=AHIEtbTM2Z4VQCrXl2Rv5EOJOAWzt5l_eg&pli=1
 
Quote from sarue:

http://www.mcoscillator.com/learning_center/weekly_chart/is_jpm_the_burning_loh/

An interesting article by Tom McClellan suggesting a top in bonds and bottom in equities on May 14 +/- a day or two. I'm looking for a test of the March 6 ES low next week and if successful a good tradable rally. My number line is a little different, but still shows QQQ to be the relative laggard and IWM relatively strong.
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Thanks for sharing this. Interesting insight into the events surrounding some of these events.
 
Quote from Maverick74:

Great interview. Read it over completely, especially the parts on position sizing and leverage.

http://www.mercenarytrader.com/2011/03/interview-with-a-trading-legend-part-i/
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LOVE Peter Brandt's work. Read his blog every day, (or at least when he updates it). He was very active last year until there was a nasty little misunderstanding between him and a poster on his site.

http://peterlbrandt.com/

Much of the foundation of my trading, (including such Peterisms as strong opinions weakly held) come from Mr. Brandt.
 
Quote from Maverick74:

Great interview. Read it over completely, especially the parts on position sizing and leverage.

http://www.mercenarytrader.com/2011/03/interview-with-a-trading-legend-part-i/
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I loved that interview! Why? I didn't learn a damned thing from it:D

There is a lot of doubt while going thru the evolutionary process, and it is deeply gratifying to know that we all must go thru the same process. So, in correction, I did learn that. I could see myself all over that article. All the different little phases I had to go thru. It makes me appreciate ET and the collaborative efforts that traders like Mav have put together that much more. Starting to realize I could be doing better things in the trading community than wasting time down in the basement all day.
 
Quote from Maverick74:

Great interview. Read it over completely, especially the parts on position sizing and leverage.

http://www.mercenarytrader.com/2011/03/interview-with-a-trading-legend-part-i/
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Insightful interview. Thanks for sharing. Brandt for the most part risks 0.5 to 1.0% per trade, but he did also say, " For me the real payoff in being a discretionary trader – where the music really plays as you put it – is in those one, two or three trades a year that you’ve diagnosed, that you’ve really figured out, and that you back up the truck for. That is where the fun is. And no systematic trader can have that fun."

However, he is able to back the truck on rare trades because of his extensive trading experience.
 
Also worthy to note that from 1991 to 1995, Brandt's returns ranged from -8.36% to +1.49%, which may have influenced him to stop trading from 1996 to 2006.
The commodity markets were stagnant in the early 1990s to ~ 2002, which rendered any chart pattern analysis irrelevant in primarily sideways markets.

In that time frame, people like Dan Zanger applied chart pattern analysis to tech stocks did extremely well.
 
Quote from Maverick74:

Great interview. Read it over completely, especially the parts on position sizing and leverage.

http://www.mercenarytrader.com/2011/03/interview-with-a-trading-legend-part-i/
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Mav - thanks for sharing. Very interesting and the points about risk management and overleveraging (imo simply the only fatal mistake a trader can make) are very valuable.

That said, I'd like to play devil's advocate for a bit. What I also found interesting was his interest in moving from daily charts to weekly charts. I've come across a few other people of the same mindset (some even suggesting monthly charts). This strikes me as a bit counterintuitive in that if you have an edge, you'd want to trade it as frequently as possible - is trading a longer timeframe an edge in and of itself? Certainly more difficult to prove it's not an edge.

Given he disregards EMH and given that (as another poster mentioned) he takes 2-3 big trades a year that largely make his numbers - even during a 30 year career is that enough to differentiate him from simply being the lucky trader?

...this is all a bit tongue in cheek as he's certainly made more money than I probably ever will and I largely agree with most of what he says.:)
 
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