The ACD Method

[Maverick74]

Quote from kinggyppo:

"01-18-13 12:50 PM
I'm going to start posting some charts on this USD/YEN breakout. I haven't been tracking the number line on it but this weekend and I'll go back and create the number line for it and post it here.

This pair had a major breakout just under 80 a few months back. I believe this breakout is still very early in the game and this pair could easy get north of par by this spring.

The first chart I'm posting is the monthly chart. We got a monthly A up in Oct and then in Nov, Dec and now Jan. "


I think this was the first post about this from Mav on Jan 18th.

I think I can top that King.

Maverick74

Registered: Mar 2002
Posts: 17916

07-28-11 08:17 PM

Watch the 30 year bonds. We confirmed a monthly A up and we failed at the weekly about 4 times but then broke above today. Tomorrow is the last day of the month which means we get new levels next week. I get the feeling the world is massively short bonds and the price action is very strong. These bonds could really explode to the upside regardless of the debt ceiling news. This is the trade to watch in my opinion. I think everyone is leaning the wrong way. I would look at the weekly levels next week after we get the news to take action.

Spoos are sitting on their monthly levels. We already bounced off of them twice to the tick. But with tomorrow being the end of the month, I would wait for next month's levels to take action.

http://www.elitetrader.com/vb/showthread.php?s=&postid=3250875&highlight=bonds#post3250875

 

[Maverick74]

And here is the Natty call. The low tick of the decade.

Maverick74

Registered: Mar 2002
Posts: 17917

04-21-12 04:33 PM

Quote from Maverick74:

Let's look at Nat Gas. People often ask what is the best way to try to pick a bottom in Nat Gas. Well, the best way probably is not to. The 2nd best way is when you have something that has been this weak for so long is to make your first entry a buy on strength, not weakness. In other words, wait for at least a confirmed weekly A up. Trying to buy at lower and lower lows is very dangerous. The only level I would try to buy even a small position on a bounce would be the failed QTR A down. I have noted many times on this thread that long term trends often end at the QTR levels.

So this month, we have the monthly A down in nat gas at 193.80 and the QTR A down at 189.30. This means we are in mans land here. This thing could still fall a lot further.

Here was my post back on April 9th. I mentioned that the QTR A down would be a reasonable target and sure enough, here we are. I also mentioned that QTR levels tend to mark the end of long term trends. That is not to say THIS Qtr level is the one but it's a reasonable entry here for a bottom picker with a tight stop. With a possible add on a weekly A up, adding into strength.

http://www.elitetrader.com/vb/showt...0318&perpage=6&highlight=natty&pagenumber=839

 

[Maverick74]

We use to have a phrase in my office whenever we had a monster ACD trade:

"It's not me, it's ACD!"

All these trades are right out of the ACD playbook. I would love to profess having supernatural powers but these were all textbook trades that we discussed at length on this very thread. It's all in the archives. For a pure price action based trader, there is not a better methodology in the world.

Psychic powers help of course, but not required.

 

[kinggyppo]

Quote from Maverick74:

We use to have a phrase in my office whenever we had a monster ACD trade:

"It's not me, it's ACD!"

All these trades are right out of the ACD playbook. I would love to profess having supernatural powers but these were all textbook trades that we discussed at length on this very thread. It's all in the archives. For a pure price action based trader, there is not a better methodology in the world.

Psychic powers help of course, but not required.

I was reading thru some of the older parts of the thread, it is actually a very easy read due to the fact that trolling is minimized, of course ACD is not everyone's cup of tea, I thought the yen call was pretty huge considering the depth of liquidity in that pair, carry on!!

 

[Maverick74]

Quote from Trader.Fighter:

Objectively speaking US indices went up as a whole, so it is not a large feat if this sector had a positive turn. We are still far away from intended targets to be speaking of accolades.

The broad market went up just 1%, US Steel went up 5%. LOL. If it keeps that ratio up I'll be more then happy. And I'm not asking for accolades. Just pointing out that X is "acting" well. And it has been "acting" well for weeks now. I have tons of data on X. I would not have pointed the trade out if I didn't think the price action justified it. But yes, this is a longer term trade so there is no need to track every uptick and downtick. But this stock can really move once it gets going.

 

[ammo]

Quote from Trader.Fighter:

large feat coolade.

dont really care about his feet or what he drinks,
it was a good call.. generous of him to share it beforehand

 

[Maverick74]

Quote from chicagodon:

Mav, do you have a read on aapl at all?

Regarding AAPL, so there is a lot to say here. I got long AAPL a month ago around 460 when it confirmed on my 30 day. Usually I avoid stocks like AAPL (highly watched) but this is the first time in a year it confirmed! And it was the first time in a year it made a QTR A up (the rarity principle).

Now it has made a large move and we have the big AAPL event next week. The number line is still in confirmation mode (barely) but the 5 day has shown a lot of weakness. We've had two back to back monthly A ups. It's very normal now to have an inside month and that is EXACTLY what I see happening here. So let me give you my breakdown.

The monthly A up is around 514, we may just pop up to that on the news this weak but I do NOT think we will confirm again this month. We'll likely get a sell on the news event. So what does that mean? It means probably a test of the monthly A down, but not a break. Where is that monthly A down? Around 474. I would definitely get long down there "if" we test and hold. I think we will and we'll have that inside month and break out again to the upside again in Oct.

I'm still long calls but I've sold a lot of juicy calls going into this event so my upside is tepid here and if we test that 514 area I'll be out and looking to get back in later. If you are NOT already long AAPL, I would NOT get long here. Nor would I get short here. It's very possible we test and fail at the monthly A up and simply grind sideways forming a new base over the next month in which it will be pointless to tie up margin trying to short it. Much better short candidates out there.

 

[chicagodon]

Quote from Maverick74:

Regarding AAPL, so there is a lot to say here. I got long AAPL a month ago around 460 when it confirmed on my 30 day. Usually I avoid stocks like AAPL (highly watched) but this is the first time in a year it confirmed! And it was the first time in a year it made a QTR A up (the rarity principle).

Now it has made a large move and we have the big AAPL event next week. The number line is still in confirmation mode (barely) but the 5 day has shown a lot of weakness. We've had two back to back monthly A ups. It's very normal now to have an inside month and that is EXACTLY what I see happening here. So let me give you my breakdown.

The monthly A up is around 514, we may just pop up to that on the news this weak but I do NOT think we will confirm again this month. We'll likely get a sell on the news event. So what does that mean? It means probably a test of the monthly A down, but not a break. Where is that monthly A down? Around 474. I would definitely get long down there "if" we test and hold. I think we will and we'll have that inside month and break out again to the upside again in Oct.

I'm still long calls but I've sold a lot of juicy calls going into this event so my upside is tepid here and if we test that 514 area I'll be out and looking to get back in later. If you are NOT already long AAPL, I would NOT get long here. Nor would I get short here. It's very possible we test and fail at the monthly A up and simply grind sideways forming a new base over the next month in which it will be pointless to tie up margin trying to short it. Much better short candidates out there.

Great insight thanks Mav.

 

[koolaid]

Mav,

Regarding the number lines, do you use a program or software to calculate them automatically? Given that you're watching so many instruments at a time, it can get overwhelming to track all the number lines. I know you said your ACD levels are drawn automatically, but is that also true for your number lines?

 

[Maverick74]

Quote from koolaid:

Mav,

Regarding the number lines, do you use a program or software to calculate them automatically? Given that you're watching so many instruments at a time, it can get overwhelming to track all the number lines. I know you said your ACD levels are drawn automatically, but is that also true for your number lines?

Like a true artist, I carefully craft them by hand.

And yes, it's a lot of work. But that is why they are so effective because they are not some formulaic output that is easily attainable. Trust me, the labor is worth it. I could not trade without the number lines.