The ACD Method

For me right now it's about these number lines. Crude and NG look pretty good. Both were negative on the 30 day and are now turning positive. Especially impressive is oil, now at a 4 on my 5 day. That thing turned around pretty quick. Also has been holding higher while others are testing monthlies/quarterlies. We had that small pivot, (third day declining) today and crude moved!

Like crude is NFLX. Things holding in there given the action this week. Right at the highs of the week.

Shan's right though. Just trade this range bound market for now. Might be here for a while, (think Mav mentioned this early in the month).
 
Quote from Maverick74:

I'll try to clarify my original comment and expand on it some. I'm making the distinction here between strategy and execution. The two things are very very different. One can have a great strategy but fail to execute it. One can have a terrible strategy but be really good at executing it. ACD is a methodology, a process, a way of looking at the market. That's wonderful but that alone is not going to make you money. What makes you money is the ability to execute, what some call trading. Trading is the actual execution of an idea.

The problem newbies have is their execution is terrible. They have many great ideas. In fact I'm always surprised when I meet new traders and listen to their ideas. Some of them are really good! They just don't have the experience to execute them. That takes time, a lot of time.

So my comments you quoted there allude to this paradox. Having a great strategy but no real ability to execute it. So what I'm trying to say is that one needs to build up a lot of screen time and just put in the hours to develop a feel and understanding of how markets work in general. Having a good strategy can help with this but it's secondary. The good news is once you have that ability to execute, the strategy becomes secondary. I know many guys I use to trade with in NY that had real solid edges back in the day and now those edges are gone. But just from experience alone, they are still able to make a living at trading because they see the market really well and can execute it.

This is true btw with most all things in life. One can have ideas, knowledge, good intentions, all that stuff, but if you can't actually implement them then you can only get so far. Sports usually provides a great analogy to this. Obviously I can teach you how to play tennis or football. I can show you the rules of the game. I can actually show you how to throw a tight spiral and hit a wicked kick serve but if you can't actually perform and execute under pressure, then your skills will only have value on the practice court or on a Sunday afternoon in a park.

A lot of guys don't understand that about trading. They spend so much time looking for the grail and backtesting and zero time working on execution. I think one can do both with the understanding that execution is the skill they have to get down first. I've always said, no trader blows out because he/she has a bad strategy or because they lack market knowledge, they blow out because they can't execute. I hope this helps. And welcome to the thread!
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Thanks for clarifying Mav,

I understand the distinction, and I am coming to terms with the 'execution' presently. Its tough, since I personally think that the success in the execution has alot to do with one's conviction of their strategy. You need to 'know' before you execute, and you cannot 'know' without having actually traded a few thousand times. Hence the Paradox.

Whats your thoughts on trading drills specifically designed to train execution, and nothing else? Strategy is great, but if it stops you from learning to execute (ie keeping you on the sidelines for the majority of the trading day), a 'holy grail' strategy might actually be a hinderance to someone with poor execution skills.

A goal, of say, 10 wash trades per day, focusing on tight stop losses would help with execution. Cutting losers is a major problem for inconsistent traders, as is 'avoiding being stopped out' (from an earlier post of yours). So forget about any strategy, enter a position where you feel you might not be stopped out, set a tight stop (tight enough to be able to afford the exercise for an indefinite period), then exit as soon as your 'right', and move onto the next trade. No emphasis on Pnl, no 'letting winners run', focus only on execution.

Being execution practice, it has to be 'live' trading with an appropriate position size relative to your own account, so you know your trading. 10 trades a day - 200 trades per month - that's alot of exection practice.
 
Cipherscribe,

This may just be a different iteration on the comments above. I look at trading as a craft that is constantly being honed. The learning process is continuous and intense. I am amazed at how long it has taken basic concepts to sink in and truly become a natural part of my trading. I am also surprised at how new insights continuously come along. Ultimately, your persistence and openness to learning will pay off. By contrast, stubbornness, lack of persistence and an inability to be honest with oneself will take a very heavy toll in this business.

ACD is a new tool for me despite years of professional trading and I find it extremely useful as a market framework but I am still figuring it out. Despite my newness to it as a method, I can say that it has unequivocally made a positive impact in my performance and results. This thread has been instrumental in helping me develop a way to use ACD that works for me. That said, I had already paid a lot of tuition getting to this point. Per Mav's comments, the execution part was probably working already. There is no teacher like experience and in a competitive field, experience tends to be measured in years or even decades. If you find the markets truly fascinating and really wish to trade for a living, you will start to find things that make sense and work for you. I would encourage you to at least keep ACD on your radar as a way of looking at markets.
 
Quote from cipherscribe:

Thanks for clarifying Mav,

I understand the distinction, and I am coming to terms with the 'execution' presently. Its tough, since I personally think that the success in the execution has alot to do with one's conviction of their strategy. You need to 'know' before you execute, and you cannot 'know' without having actually traded a few thousand times. Hence the Paradox.

Whats your thoughts on trading drills specifically designed to train execution, and nothing else? Strategy is great, but if it stops you from learning to execute (ie keeping you on the sidelines for the majority of the trading day), a 'holy grail' strategy might actually be a hinderance to someone with poor execution skills.

A goal, of say, 10 wash trades per day, focusing on tight stop losses would help with execution. Cutting losers is a major problem for inconsistent traders, as is 'avoiding being stopped out' (from an earlier post of yours). So forget about any strategy, enter a position where you feel you might not be stopped out, set a tight stop (tight enough to be able to afford the exercise for an indefinite period), then exit as soon as your 'right', and move onto the next trade. No emphasis on Pnl, no 'letting winners run', focus only on execution.

Being execution practice, it has to be 'live' trading with an appropriate position size relative to your own account, so you know your trading. 10 trades a day - 200 trades per month - that's alot of exection practice.
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I'll chime in. here a bit give my opinion on things. I think when Mav mentions "execution" he is not talking about hitting buy, sell, setting stops etc. Execution is about seeing things in real time and being able to execute your ideas. Managin positions according to an objective view of price action.

ACD helps to provide some rules and framework for trading. But there are so many nuances to trading. Markets have a context to them. Being a trader is like playing a sport. You are always actively engaged in the market and is upto you to learn about the nuances of things. How do markets usually trade in certain enviroments? What happens when the market is confused? How does on approach that market. How does Vol trade coming out of a high volatility cycle. How do sectors rotate?

Learning all this just comes from screen time and knowing what to look for. Its alot easier if someone is pointing these things out to you btw.

Strategy is important, but the most important thing is understanding market action and executing your plan and know when to change or when to stay the course!
 
Quote from OneFive:

Cipherscribe,

This may just be a different iteration on the comments above. I look at trading as a craft that is constantly being honed. The learning process is continuous and intense. I am amazed at how long it has taken basic concepts to sink in and truly become a natural part of my trading. I am also surprised at how new insights continuously come along. Ultimately, your persistence and openness to learning will pay off. By contrast, stubbornness, lack of persistence and an inability to be honest with oneself will take a very heavy toll in this business.

ACD is a new tool for me despite years of professional trading and I find it extremely useful as a market framework but I am still figuring it out. Despite my newness to it as a method, I can say that it has unequivocally made a positive impact in my performance and results. This thread has been instrumental in helping me develop a way to use ACD that works for me. That said, I had already paid a lot of tuition getting to this point. Per Mav's comments, the execution part was probably working already. There is no teacher like experience and in a competitive field, experience tends to be measured in years or even decades. If you find the markets truly fascinating and really wish to trade for a living, you will start to find things that make sense and work for you. I would encourage you to at least keep ACD on your radar as a way of looking at markets.
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Good advice here :)
 
Quote from cipherscribe:

Mav,

Admittedly, an old post, as I am working through the thread, so apologies in advance.

That said, I have heard you say this on a few other threads, and it really P***es me off. Speaking from the world of the borderline-yet-to-be-profitable, (although I am beating the S&P this year), why else do you think we are reading these posts, if not to learn how to trade?

These posts make me think the time I am investing in reading them at all is like buying a new steering wheel for a car without an engine. Geeez.

I have watched Fishers vids, and imho his delivery is toward people like myself who are not yet consistent - providing them with the tools to lose small and win big, with ACD helping to keep them on the right side of the market.

If we are all doomed to lose our account because we don't know how to trade and we are just slapping another indicator on our loser trades, then whats the point of posting the information in the first place? And if everything on ET (and every other forum on trading for that matter), is only useful if one knows how to trade in the first place, then firstly - profitable traders are hardly likely to be searching for other methods that could interrupt, or even destroy their profitability, and second - where do so called 'strugglers' go to find the first piece of the puzzle - the all elusive How To Trade?

I'm no newby at trading, with more years than I care to count for someone that has yet to master trading to any great degree, and although I continue to trade and try to master consistency and increased profitability, these posts of yours sure grate on me. You have conveyed a great deal of useful knowledge on this forum, and I appreciate your posts generally, but these ones make it all seem so fruitless.
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Mav has already touched on key concepts of ACD, trading etc.

From my experience after investing 5,000 hours of screen time exclusively on ACD and market profile combined and trading only Crude oil, i would say beauty of ACD is that besides keeping me on the right side of the trade i actually can not execute without ACD reference points.

Therefore for me the KEY contribution of ACD is the execution part. I use Market profile to get structure of the market and ACD for execution.

An example of using market profile and ACD together will be, crude opens up above yesterday value area high, daily pivot and daily pivot range are below the open and Crude makes an A up.

I am long and staying long.

For short it will be opposite of above set up.

When i first read something like what i mentioned above, i could not make sense of it. I just could not understand how supposedly something as complex as trading can be so simple.

After all the screen time and fully understanding a set up like above and couple of other like these set ups, i can understand why fish in his NYMEX webinar series said that " he can put any trader from GS, JPM under the table in 10 minutes in a trading contest".


I am not sure about 10 minutes but Fish himself likes to exaggerate to make a point.

Hail to Mark Fisher. With CL up 200 ticks one day and then complete reversal next day and then reversal again following day- like over the last 4 days- ACD keeps one in the GAME.

Till couple of months i maintained a journal at elite titled " day trading crude without indicators". I think i posted about 300 charts there.
 

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Quote from Maverick74:

Corn, wheat and soybeans all failed at the QTR A up yet again. Oats as well.
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This will be another mother of all shorts once it breaks (just like every other commodity market in history)...commodity prices rally like there is no end is site until it gets to a point when the hedgers step in and top it out and put back into an extended bear market for the next few years....keep hoping for no rain in the midwest to drive the price/mania up more...the only problem is trying to figure out which months or spreads to be getting short (you cant just short the front months when the markets turn bearish for an extended period of time)...
 
Quote from jsmooth:

This will be another mother of all shorts once it breaks (just like every other commodity market in history)...commodity prices rally like there is no end is site until it gets to a point when the hedgers step in and top it out and put back into an extended bear market for the next few years....keep hoping for no rain in the midwest to drive the price/mania up more...the only problem is trying to figure out which months or spreads to be getting short (you cant just short the front months when the markets turn bearish for an extended period of time)...
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We've been putting corn in our cars only to feed wheat to livestock. Mother nature still matters and the clock is ticking against the corn crop (but it is a bit harder to kill beans).

Picking tops in distressed agricultural markets is treacherous territory. Remember a few years ago how absurd Minneapolis Wheat got when it went to $12? All the blown out top pickers wished they still had some margin money left when it finally got truly insane at $18. By the time it got to $25, the only sellers left were stragglers liquidating longs. Be careful.
 
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