The ACD Method

While only one day left for the monthly A Up/Dn calculations based on 1/2/14, today saw an overall increase in A Ups to 32 but a major decrease in A Downs to 39. The A Downs have been running in the 100 plus area. Net day of -7.

You may recall for longer term trading Mav suggested: "I think if I was going to put together a long term strategy, I would actually look for yearly A ups to get long and hold as long as they stayed above the yearly A ups. If you wanted to dial it down a time frame, you could rotate every QTR and just stay long the QTR A ups."

Stocks making Qtr A Ups today included: ARE, CLFD, GD, NSSC, PDI and SIMO.
 
I wouldn't call it arbitrarily sitting in spreads in CL daily... Haha.... But its a tough deal.. Let's put it that way... If your just trading calendars for convergence your gonna learn a powerful lesson... I'm kinda kinky and I trade that way to ;) that being said... I've survived despite myself...
 
Cave,
Interesting, I dont know enough about the fundamentals to trade spreads on a swing basis....Honestly, I just watch the first few calendar spreads to help give me bullish/bearish bias on the day, and if I think trading the outright carries too much risk I'll just trade the calendar in that same direction, then possibly look to leg out.

Mav,
do you do any gamma scalping? Have you ever tried/thought about scalping gamma using ACD levels? Like putting on a straddle, but instead of getting delta neutral at a +/- delta level, scalp the gamma at A up/down level to fade that A move? I've scalped some gamma in the past, never really thought about ACD while doing it though....my brain is just trying to think of some new trading ideas this morning i think....
 
cdcaveman said:
I wouldn't call it arbitrarily sitting in spreads in CL daily... Haha.... But its a tough deal.. Let's put it that way... If your just trading calendars for convergence your gonna learn a powerful lesson... I'm kinda kinky and I trade that way to ;) that being said... I've survived despite myself...
More...

I thought you were more of an asymmetric trader vs mean reversion guy hence your interest in the TED spread. If I trade these spreads it's because I want to convexity they provide, not the few ticks in mean reversion. Hell, if you want mean reversion just sell option premium. :)
 
Here's the issue: many of the stocks in your list have been brought to your attention only AFTER they broke out

Try finding them BEFORE they gap up (if every Tom Dick Harry sees it = crowded trade) is the USP of ACD

Having a bunch of random stocks that have already exploded up is far less value

It would've been pointless for Mav to point out X only after it had broken out - everyone else can see it


Robert Yanks said:
While only one day left for the monthly A Up/Dn calculations based on 1/2/14, today saw an overall increase in A Ups to 32 but a major decrease in A Downs to 39. The A Downs have been running in the 100 plus area. Net day of -7.

You may recall for longer term trading Mav suggested: "I think if I was going to put together a long term strategy, I would actually look for yearly A ups to get long and hold as long as they stayed above the yearly A ups. If you wanted to dial it down a time frame, you could rotate every QTR and just stay long the QTR A ups."

Stocks making Qtr A Ups today included: ARE, CLFD, GD, NSSC, PDI and SIMO.
More...
 
Maverick74 said:
I thought you were more of an asymmetric trader vs mean reversion guy hence your interest in the TED spread. If I trade these spreads it's because I want to convexity they provide, not the few ticks in mean reversion. Hell, if you want mean reversion just sell option premium. :)
More...


I actually do sell premium occasional.. but I don't stand on that all the time.. I went short premium a little early on the index.. really makes ya feel like you know what your doing haha let me tell you.. Seems to me there is a lot of dislocation in energy right now.. like you said HO, NG, and CL is getting more backwards near the front..
 
Mav, once before I asked about ZC, ZS, ZW and you said one has to be aware of the seasonality in these futures.

There is also seasonality in NG and one also has to be aware of storage capacity, inventory and draw if I understand this correctly.

The situation with HO and RB is similar I believe.

What is the best source to get a grasp on the seasonality and other issues that matter?
 
Hi,

I've been trying to keep number lines on shares (based on examples of the scores in logical trader book) but with a lot of them nothing will happen (no A up, no A down) say about a 1/3 of the time. Are the shares I'm trading not volatile enough or is this normal?
 
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