The ACD Method

Mav,

I'm a longtime follower of this thread and am currently starting my second read thru of the book.

On your TOS chart, are the green a red lines your monthly A up/down points?

Also, I'm trying to go back to some of his examples to figure out just how he comes up with his A up/down differentials from the opening ranges, but it's basically me just guessing. I'm assuming it has something to do with the underlying's recent volatility?

It's very difficult for me to start coming up with number lines if I'm not even sure my A values are correct.

Lastly, what time frame do you use for your monthly and quarterly opening ranges? I know he uses two weeks for the first and second halves of the year. But, if those trand lines in your chart are the A values, then it looks like you are using a shorter time frame than daily. If you do not wish to share this then I understand.

But thanks again for all the help.

Also, if you have already covered this in the thread then let me know and I'll be sure to go back and do my homework.
 
Quote from hoop121:

Mav,

I'm a longtime follower of this thread and am currently starting my second read thru of the book.

On your TOS chart, are the green a red lines your monthly A up/down points?

Also, I'm trying to go back to some of his examples to figure out just how he comes up with his A up/down differentials from the opening ranges, but it's basically me just guessing. I'm assuming it has something to do with the underlying's recent volatility?

It's very difficult for me to start coming up with number lines if I'm not even sure my A values are correct.

Lastly, what time frame do you use for your monthly and quarterly opening ranges? I know he uses two weeks for the first and second halves of the year. But, if those trand lines in your chart are the A values, then it looks like you are using a shorter time frame than daily. If you do not wish to share this then I understand.

But thanks again for all the help.

Also, if you have already covered this in the thread then let me know and I'll be sure to go back and do my homework.
More...

Yes regarding the TOS charts.

We have discussed this before but I'll go over it again. The levels you use are not terribly important. I use the levels as a "relative benchmark". So my number lines, my A levels, my OR could all be different then yours but both of our relative relationships should be the same. The idea is to not keep changing them. Does this make sense?
 
I suppose.

I would have thought that the A levels were very important though. But I guess that what you are saying is it doesn't really matter because they are really just guidelines that give you entry and exit points.

But what I don't understand, is if my A values are only 7 ticks on something when they should be 15, then my numbers lines could be greatly different from what they should be.

For instance, if I made an Aup that closed above the opening range then I mark it as a 2 point. But if I had been using 15 ticks, maybe it would not have qualified as an Aup that day and then my number line would have a 0 on that day.

I understand that the OR's of different traders will be different because it's all about their timeframe and preference, but it still doesn't help determine what my A values should be.

But regardless of what I end up using, you're saying that they should never change?

I'm assuming because that will screw up the number lines?
 
Quote from hoop121:

I suppose.

I would have thought that the A levels were very important though. But I guess that what you are saying is it doesn't really matter because they are really just guidelines that give you entry and exit points.

But what I don't understand, is if my A values are only 7 ticks on something when they should be 15, then my numbers lines could be greatly different from what they should be.

For instance, if I made an Aup that closed above the opening range then I mark it as a 2 point. But if I had been using 15 ticks, maybe it would not have qualified as an Aup that day and then my number line would have a 0 on that day.

I understand that the OR's of different traders will be different because it's all about their timeframe and preference, but it still doesn't help determine what my A values should be.

But regardless of what I end up using, you're saying that they should never change?

I'm assuming because that will screw up the number lines?
More...

Right, it's all relative. For example, my 30 day on ES might be plus 10 and my 30 day on crude might be plus 20. Yours might be plus 5 and 10 respectively. Both of us are showing relative strength in crude to the ES. That is what I'm saying. You will get to know your levels in time. For example, if you make it harder for a product to confirm an A up then you will over time see where on your number line a product starts revealing itself. If I make my A levels loose, I realize I'm going to generate huge plus and minus number lines from time to time. As long as both of us have a feel for "our" values, we'll be able to put them to use. At the end of the day, you have to make ACD fit into your trading style, not the other way around.
 
Quote from Maverick74:

Right, it's all relative. For example, my 30 day on ES might be plus 10 and my 30 day on crude might be plus 20. Yours might be plus 5 and 10 respectively. Both of us are showing relative strength in crude to the ES. That is what I'm saying. You will get to know your levels in time. For example, if you make it harder for a product to confirm an A up then you will over time see where on your number line a product starts revealing itself. If I make my A levels loose, I realize I'm going to generate huge plus and minus number lines from time to time. As long as both of us have a feel for "our" values, we'll be able to put them to use. At the end of the day, you have to make ACD fit into your trading style, not the other way around.
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100% understand this now.

having more conservative A values might have less trades, but they will cause a consecutive 9 point day to happen less often resulting in a much higher confidence trade.

now, i've just got to find out how to get someone to write a code for me to use on TOS so I do not have to mark my moving pivot averages and number lines by hand everyday. :)
 
Quote from Maverick74:

Right, it's all relative. For example, my 30 day on ES might be plus 10 and my 30 day on crude might be plus 20. Yours might be plus 5 and 10 respectively. Both of us are showing relative strength in crude to the ES. That is what I'm saying. You will get to know your levels in time. For example, if you make it harder for a product to confirm an A up then you will over time see where on your number line a product starts revealing itself. If I make my A levels loose, I realize I'm going to generate huge plus and minus number lines from time to time. As long as both of us have a feel for "our" values, we'll be able to put them to use. At the end of the day, you have to make ACD fit into your trading style, not the other way around.
More...

This is by far the best explanation that I have read on the subject of using number lines.

Fisher acknowledges that different ORs work best for different trading styles, and to my knowledge he has kept the A and C values constant for CL for 2 years despite huge variations in daily range.

What he did not touch on is the fact that different ORs mean different A/C levels and thus different number lines over time. His explanation of 9 being the magic number loses credibility when my 9 might be your 6.
 
I found two things useful regarding #lines.

a) It is a bit of a task to read the whole thread, but their are nuggets of wisdom throughout it regarding A/C values, # lines, opening ranges etc. Worth it in my opinion. Except for anything Mav says, that guy is full of it

:D

b) I keep my #lines in excel (as most probably do). Simple histogram charts of the 30 day and 5 day made it very easy for me to visualize the ebb and flow, and compare them to action around ACD levels. Not to be used as a signal generator, just quick visual reference.
 
Quote from medicsix:

I found two things useful regarding #lines.

a) It is a bit of a task to read the whole thread, but their are nuggets of wisdom throughout it regarding A/C values, # lines, opening ranges etc. Worth it in my opinion. Except for anything Mav says, that guy is full of it

:D

b) I keep my #lines in excel (as most probably do). Simple histogram charts of the 30 day and 5 day made it very easy for me to visualize the ebb and flow, and compare them to action around ACD levels. Not to be used as a signal generator, just quick visual reference.
More...


do you use the daily pivot for your 5 and 30 day average or do you use the 3 day pivot average as your 5 and 30 day?
 
Not sure I understand the question. I don't use pivot averages of the #lines, I just keep a chart of the rolling 30 day # line sum and a 5 day #line sum.

I watch the 3day rolling pivot range and have the pivot moving averages on the daily chart as discussed in the book.
 
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