The ACD Method
- Thread starter sbrowne126
- Start date
It's not really a problem. Very little volume trades overnight which is why there can be such large moves. Like I said, you need to find ways to compensate for that. Also, I don't think there is as much manipulation as you think. The spot market drives energy prices. You get a lot of margin calls on the close and a lot of settling of various prices, including ETF trackers.
I enjoy following this thread mostly as a lurker, but sometimes Mav says something that just stops me in my tracks and I have to chime in with a comment or question.
If I'm trading spreads with a neutral approach, is it really worth the time and effort to try and time the market as a volatility trader? When you consider all the hours spent on analysis and discretionary decision-making, is the incremental payoff in trading results worth it? Wouldn't I do better just to slap positions on markets that have shown recent volatility with an expectation that volatility will persist on many of them?
Not arguing here, just exploring a topic that I struggle with.
Gold confirmed on my number line on Jan 14th. Up 80 handles since the confirmation.
Are you talking about option spreads or futures spreads? If futures, the number lines work even better then on flat price. Honestly, the number lines drive everything in ACD because if you think about it, all the number lines are is the sum total of all the daily ACD values. And since volatility drives ACD, it's even more advantageous for people who make trading decisions based on volatility. Is the time worth the incremental payoff? Absolutely. Put another way, without the time, ACD offers ZERO payoff. So it's not like we are asking I make x per trade and with all this time added, I make x^1/10. Unfortunately the way trading works is the same way athletics works. The slope is relatively flat for long distances along the horizontal axis and then at some point down the line the slope gets very steep. In my opinion, I believe a trader or an athlete cannot get to that steep slope without the time. The small marginal benefit is actually what one deals with starting from the origin and moving out.
I tried to look for an example that best describes this. The singularity effect seems to be something that approximates what I'm talking about.
"At the Singularity Summit a few days ago, both Ray Kurzweil and Eliezer Yudkowsky made the point that progress measured by exponential advances may actually seem very slow for a long time. The early years of the graph will show a nearly flat line, and then all of a sudden -- boom!
Note that in terms of results (the vertical), halfway to the goal is not achieved until more than 90% of the time and effort (the horizontal) have been expended. Many real world examples of this have been offered; you can probably think of your own.
http://crnano.typepad.com/crnblog/2006/05/all_of_a_sudden.html
Kurzweil and Yudkowsky -- and perhaps the cognitive scientists quoted in the article above -- might say that progress toward truly thinking machines is getting close to the exponential take-off point. Similarly, we at CRN have warned that almost all of the most remarkable results that will lead to a molecular manufacturing breakthrough will occur within the final one or two percent of all the time spent on the problem. And what that means is that we may not have much warning."
"At the Singularity Summit a few days ago, both Ray Kurzweil and Eliezer Yudkowsky made the point that progress measured by exponential advances may actually seem very slow for a long time. The early years of the graph will show a nearly flat line, and then all of a sudden -- boom!
Note that in terms of results (the vertical), halfway to the goal is not achieved until more than 90% of the time and effort (the horizontal) have been expended. Many real world examples of this have been offered; you can probably think of your own.
http://crnano.typepad.com/crnblog/2006/05/all_of_a_sudden.html
Kurzweil and Yudkowsky -- and perhaps the cognitive scientists quoted in the article above -- might say that progress toward truly thinking machines is getting close to the exponential take-off point. Similarly, we at CRN have warned that almost all of the most remarkable results that will lead to a molecular manufacturing breakthrough will occur within the final one or two percent of all the time spent on the problem. And what that means is that we may not have much warning."